Belarus Monetary Policy December 2018


Belarus: Central Bank keeps rates unchanged in December

December 19, 2018

At its 19 December meeting, the Board of the National Bank of the Republic of Belarus (NBRB) opted to keep the refinancing rate unchanged at an over one-decade low of 10.0%, in line with analysts’ expectations. The Bank had previously lowered rates at its June meeting, amid record-low inflation.

In its communiqué, the NBRB signaled that a gradual slowdown in domestic demand, coupled with reduced consumer lending, should keep inflation below its 6.0% target rate this year. That said, upside inflationary risks remain over a wage increase implemented in October. Meanwhile, the external-sector backdrop also poses upside risks. These include an expected jump in inflationary pressures in Russia and high external debt, which leaves the currency prone to further devaluation.

Looking ahead, the Bank expects inflation to remain below target and close to 5.0% in 2019-2020. External-sector concerns remain, however, as an expected slowdown of the Russian economy and risks of further market volatility could prompt a further depreciation of the ruble and force policymakers to respond. As it stands, however, most FocusEconomics analysts expect the NBRB to eventually lower rates in 2019.

The next monetary policy meeting is scheduled for 6 February.

FocusEconomics panelists project the key interest rate to end 2019 at 9.5% and 2020 at 9.0%.


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Belarus Monetary Policy Chart

Belarus Monetary Policy December 2018

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

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