Page 25 - bne IntelliNews Country Report: Belarus Dec17

The National Bank of the Republic of Belarus (NBRB) will use steps as small as 0.25% to reduce the refinancing rate in 2018 , according to report compiled by Dmitry Murin, Head of the Central Office for Monetary Policy and Economic Analysis of the National Bank of the Republic of Belarus.
It is important to keep inflation close to the actual level in order to hit the medium-term goal — an increase in prices of at most 5% in 2020. As far as monetary management instruments are concerned, the central bank will switch to managing the money price instead of volumes.
The refinancing rate will be adjusted in smaller steps in comparison with 2017 — 25 basis points. Dmitry Murin stated that the current state of affairs in the economy and the baseline forecast of its development in the next few years indicate that there is still some room for reducing the interest rates of the National Bank.
The scale and speed of the process will be determined by the probability and the size of inflation risks .
Summing up results of January-September 2017, the NBRB representative drew attention to positive changes in economy and monetary management, in particular, the gradual resumption of business activity in Belarus. Moderate money supply growth rate was maintained.
The volume of bank loans matched the current macroeconomic conditions and was determined by the solvent demand. Interest rates on new loans and all loans were decreased considerably due to the falling refinancing rate and interest rates on instruments designed to regulate bank liquidity.
Continued de-dollarization processes were mentioned as well.
The growth of consumer prices in year on year terms dropped to 4.9% in September , way below the projections. Other inflation indicators demonstrated similar dynamics. Core inflation in Q3 2017 went down from 5.3% to 4%. The aggregate trend inflation, which excludes changes of relative prices, went down from 5.2% to 4%. The refinancing rate was reduced to 11% per annum in Belarus on 18 October. It was the eighth reduction since the beginning of the year.
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25 BELARUS Country Report December 2017 www.intellinews.com