Belarus Monetary Policy July 2021


Belarus: Central Bank hikes rate by 75 basis points in surprise meeting in July amid high inflation

July 15, 2021

At an unscheduled meeting on 15 July, the National Bank of the Republic of Belarus decided to hike the refinancing rate by 75 basis points from 8.50% to 9.25%, effective from 21 July. The move came after a similar unscheduled meeting that saw a rate hike in April. The Bank cancelled all its scheduled meetings in mid-March, generating uncertainty regarding the timing of subsequent monetary policy decisions.

The decision was taken mainly to contain consumer prices. Higher inflation expectations and external factors such as increasing prices for foodstuffs in trading partners and supply disruptions are exerting upward pressure on inflation, which came in at a near five-year high of 9.9% in June. In addition, the decision will help support the currency in the wake of the last round of EU sanctions, which are likely to exert downward pressure on exports and foreign deposits.

Looking ahead, the Bank’s emphasized the importance of maintaining price stability. As such, the evolution of inflation will be a key factor to watch out for, in addition to the impact of sanctions on the country’s currency via exports and financing channels, and further rate hikes should not be ruled out.

July’s rate hike surpassed even the highest forecast in our panel for the rate until end-2021, underlining the uncertainty clouding the country’s monetary policy. FocusEconomics Consensus Forecast panelists have yet to factor in the latest decision, and updated forecasts will be available in our next report on 3 August.

Author:, Junior Economist

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Belarus Monetary Policy Chart

Belarus Monetary Policy July 2021 4

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

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