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National Bank set not to reduce refinance rate in December

 

The National Bank of Belarus (NBB) does not plan to reduce its base refinance rate in December, NBB first deputy head Mikalay Luzhin told reporters in Minsk on Wednesday.

“We won’t change the refinance rate for the time being,” he said.

Mr. Luzhin noted that interest rates in the inter-bank market had significantly fallen and become close the NBB’s refinance rate. “This is normal,” he commented.

The current general downward trend in the interest rates on bank loans will lead to a decrease in the interest rates on deposits, but the determining factor will be the liquidity situation of a given bank, Mr. Luzhin noted. “Banks’ rates on individuals’ deposits depend on the liquidity situation,” he said. “This situation has now normalized. There is enough liquidity in the banking system.”

The NBB last changed its refinance rate on September 12, 2012, when the rate was lowered from 30.5 to 30 percent.

Mr. Luzhin confirmed that the National Bank was not going to increase the money supply to ensure meeting the GDP growth target and would resist possible pressure from government agencies interested to stimulate economic growth. “We have not run the printing press since June 1 last year,” he said.

The broad money supply reportedly increased by 36 percent in Belarus in the first 10 months of the year to 151,249.8 billion rubels as of November 1, whereas the NBB had aimed to keep the growth below 24 percent in 2012. // BelaPAN