National Bank won’t ease its monetary policy in 2014

Quite the contrary, the line of policy will be tightened.

The National Bank of the Republic of Belarus will not ease monetary policy against the background of the agreements on the procurement of the necessary amount of external borrowings aimed at raising the gold and foreign exchange reserves.

The National Bank said that a number of decisions to this end were made at the session of the Bank Board held on 3 January, reports the press service of the National Bank.

Thus, the implementation of measures aimed at increasing the effectiveness of bank lending will allow keeping monthly increase in lending at no more than 0.7% on average in Q1 2014. Such lending meets the 2014 targets and allows achieving the necessary level of economic development without an adverse impact on macroeconomic balance. 

The National Bank’s approaches to bank refinancing will also be tightened in order to stimulate banks to carry out their active banking transactions in strict compliance with available resources. 

The refinancing rate will remain at the same level in 2014. In the longer term the rate may be gradually changed depending on inflation and the situation in the financial market. The 2014 interest rate policy will seek to secure better profitability of deposits in Belarusian roubles compared with foreign currency deposits and protect savings from inflation. This, in turn, will enhance confidence in the national currency and contribute to the dedollarization of the economy. 

This year the exchange rate policy will continue to be based on demand and supply. However, as the chief finance institution in the country asserts, “the National Bank will not allow sharp fluctuations of the exchange rate and will smoothen them using its own tools”.