Page 31 - BELRptSept18

creates fiscal risks for the sovereign due to the potential need of further capital injections, execution of guarantees and issuance of securities in exchange of loan transfers.
Russia's state-owned banking giant Sberbank considers Belarus as a “stable profitable investment destination,” Sberbank's president and chairman of the board German Gref said in a televised interview, state news agency BELTA reported on June 4. The statement followed Sberbank's decision to scale down its European operations due to Western financial sanctions against Russian state-owned companies and banks. However, the lender is going to retain its presence in Belarus and Kazakhstan – Russia’s most important post-Soviet allies from the region. "The operations in Belarus generated a 17% return on capital last year, which is pretty good for the banking sector, although it is lower than in Russia," Gref said in the interview. "I believe this year the figure will increase to 20%, which is a normal indicator for us."
The National Bank of Ukraine (NBU) sees no reasons to greenlight the second request made by the small Minsk-headquartered state-owned lender Paritetbank to purchase the Ukrainian operations of Russia's Sberbank, after the recent rejection of its first bid by the regulator. The NBU's deputy governor Kateryna Rozhkova said in an interview with Reuters on July 24 that the outcome was yet to be determined, but she did not see how it could be different this time around. "We have refused this bank before," she added. "I cannot imagine what new argument they can provide." Staff at the central bank are still reviewing the application, however, she said, and have three months from its submission to decide. Meanwhile, according to bne IntelliNews' correspondent in Minsk, Paritetbank has changed its owners between the two bids, and is now owned by the nation's State Property Fund instead of Belarusian President Alexander Lukashenko’s administrative affairs department.
8.2 Central Bank policy rate
The National Bank of Belarus (NBB) cut its key refinancing rate from 10.5% to 10% on June 27.
The National Bank of Belarus (NBB) intends to cut its benchmark interest rate to 14-16% by the end of 2017 , its deputy chairman Sergei Kalechit said on October 4.
Belarus’ refinancing rate may be reduced to 9-9.5% per annum by the end of 2019 , the Deputy Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Sergei Kalechits said on August 2, reports BelTA . Next year's monetary management policy is expected to focus on bring the consumer prices index down to 5% as of December 2019 over December 2018, and the central bank will continue its policy of targeting inflation. The average broad money supply, which remains an intermediate reference point for the monetary management policy, is expected to grow by 9-12% over the same period. Another goal is to raise the country's gold and foreign exchange reserves to at least $7.1bn, or two months' worth of import of merchandise and services.
31 BELARUS Country Report September 2018 www.intellinews.com