Belarus Monetary Policy April 2021


Belarus: Central Bank hikes rate by 75 basis points in surprise meeting in April

April 16, 2021

At an unscheduled meeting on 14 April, the National Bank of the Republic of Belarus decided to hike the refinancing rate by 75 basis points to 8.50%, to take effect from 21 April. The move came after the Bank cancelled all scheduled meetings on 12 March.

The decision came amid persistent high inflation, which reached 8.5% in March—well above the Bank’s 5% target—despite the price regulations imposed on certain food items in the same month. Last year’s currency depreciation, the abolishment of VAT privileges and increasing international commodity prices have fueled price pressures recently, raising inflation expectations and forcing the Bank to take action. Moreover, economic activity was above pre-pandemic levels in Q1, while the hike may have also been aimed at attracting foreign capital, in a bid to counter the downward trend in international reserves observed in recent months.

Looking ahead, the Bank did not provide explicit forward guidance on the direction of interest rates, but it is likely to keep a hawkish stance until inflation is brought under control.

On the outlook, analysts at VTB Capital said:

“Overall, in the absence of a monetary policy meetings schedule and 'data dependent' ambivalent forward-looking signaling provided by the NBRB Board's statement, we believe the policy rate is likely to stay flat at 8.5% for the remainder of 2021 and decline to 7.0% in the medium term. However, we attach a high level of uncertainty to this path.”

Our panelists are still factoring in the recent events. The next Consensus Forecast will be released on 11 May.

Author:, Junior Economist

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Belarus Monetary Policy Chart

Belarus Monetary Policy April 2021 0

Note: Refinancing rate in %.
Source: National Bank of the Republic of Belarus (NBRB).

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