MINSK, 20 March (BelTA) – The current trend of interest rates falling gradually will stay in place but a lot will depend on inflation, BelTA learned from Dmitry Murin, Head of the Central Office for Monetary Policy and Economic Analysis of the National Bank of the Republic of Belarus (NBRB), during a forum on the strategy and tactics of entrepreneurship development in the country, BelTA has learned.
The official said: “The gradual reduction trend will remain in place. But a lot will depend on inflation levels in the country, on inflation expectations. We estimate inflation expectations to be twice as much as the actual inflation level right now.”
The central bank will continue working to keep inflation at 4-5% at most for the next five years. The main efforts will be channeled into controlling money supply. It is the key factor to ensure price stability.
At the same time the central bank intends to improve the instruments it uses. In particular, transition to inflation targeting in two or three years as a more effective way to pursue the monetary policy was mentioned. “Certainly, a lot will have to be done both inside the National Bank and together with the government. We are talking primarily about increasing our operational independence, about transition to free floatation in the area of exchange rate policy,” Dmitry Murin added.
At present the exchange rate experiences limited interference on the part of the National Bank, which can smooth out excessive fluctuations on the currency market if necessary. “We intend to gradually move away from that. We want the exchange rate on the market to be the result of purely fundamental factors based on supply and demand. The process is rather lengthy. We estimate it will take about two to three years. If everything goes well, we will be able to say that the Belarusian ruble floats freely, so to say,” Dmitry Murin concluded.
