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National Bank Lowers Refinance Rate For Sixth Time This Year

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National Bank Lowers Refinance Rate For Sixth Time This Year

Since July 19, 2017, the rate will be reduced from 13 to 12 percent per annum.

The National Bank will reduce the refinancing rate for the sixth time this year. Since July 19, 2017, the rate will be reduced from 13 to 12 percent per annum. This was reported by the press-center of the National Bank.

The rates for constantly available and bilateral bank liquidity support operations will reduced from 15 to 14%.

"Inflation will remain at a low level. According to the estimates, in June 2017, in annual terms, it will be about 6,2%. At the same time, there is a uniformity in the dynamics of inflation for commodity groups, which indicates an increase in the stability of its slowdown. This is confirmed by the dynamics of core inflation, which in June 2017 is assessed at about 5,3% in annual terms, " — stated in the message.

Moderate rates of money supply growth, positive changes in the sustainability of payments balance and stability of the foreign exchange market contribute to consolidation of these trends, the National Bank believes.

In June 2017, the increase in the average broad money supply will still be about 5% in annual terms. The net supply of foreign currency, which remains in the domestic foreign exchange market, positively affects the level of gold and foreign exchange reserves and ensures the stability of the exchange rate of the Belarusian ruble.

"Against this background, the inflationary expectations are slowing down, which will favorably affect the intensity of price growth in the coming months. Opportunities for further lowering interest rates in the economy will be determined by the stability of reducing inflationary risks, " — the regulator writes.

As previously reported, the regulator this year already reduced the refinancing rate by 1 percent five times. Since June 14, the rate has been 13%.

At the same time, the problem of increasing the availability of credit remains one of the key issues. Despite this, the National Bank promises to maintain the basic principle of pursuing interest rate policy — exceeding the yield of savings in the national currency relative to foreign currency, and ensuring positive interest rates in the economy in real terms.

According to the National Bank, the average interest rate on new loans in Belarusian rubles (excluding preferential ones) decreased by 12,8 percentage points last year and amounted to 20,5% per annum. Taking into account preferential lending, the rate for all ruble loans in December 2016 was 12%. "More significant than forecasted, lower interest rates contributed to the growth of price availability of credit resources for the economy. At the same time, the banking system came across the problem of a small number of effective investment projects in the economy against the backdrop of the debt overburden of the enterprises. And this is in the conditions of a significant excess of ruble liquidity, " — the regulator draws attention.

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