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01 July 2016, 12:15

Key lending rate in Belarus down to 20% per annum on 1 July

MINSK, 1 July (BelTA) – The refinancing rate of the National Bank of the Republic of Belarus was reduced to 20% per annum on 1 July, BelTA learned from of the information and public relations office of the country's central bank.

On 1 July the refinancing rate was reduced from 22% to 20% per annum. The interest rate on standing and bilateral operations designed to keep up the current liquidity of Belarusian banks was reduced from 27% to 25% per annum. The interest rate on standing operations designed to drain the liquidity of Belarusian banks went down from 15% to 13% per annum.

Apart from that, as from 1 August 2016 the recommended top limit on interest rates on new fixed-term bank deposits of individuals in national currency will be decreased. If the limit is exceeded, the reserve requirements are raised for the bank that has exceeded the limit. As from 1 August 2016 the recommended top limit will be reduced from 1.0 to 0.9 of the interest rate on the NBRB's standing facilities in the form of overnight loans.

According to the source, the NBRB decisions have been primarily prompted by the slower inflation processes. According to the National Statistics Committee of Belarus, in May 2016 the consumer price growth slowed down to 0.5% as against April 2016 and to 12.4% as against May 2015.

In May 2016 the year-on-year increase in broad money supply totaled 18.9%. The dynamics of this indicator enables conditions conducive to further inflation decline due to monetary factors. With resources on the money market getting cheaper, opportunities are available for continuing the policy of reducing the risk premium in the interest rate.

Consequent decisions concerning monetary management will be made depending on macroeconomic conditions and taking into account the comprehensive forecast of development of the Belarusian economy.

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