Belarus’ central bank lowered its benchmark refinancing rate by 50 basis points to 9.50 percent to ensure interest rates remain neutral and inflation meets the target this year in light of a more intense slowdown of inflation in the second quarter of this year.
It is the first rate cut by the National Bank of the Republic of Belarus since June 2018 but extends the easing cycle that was begun in April 2016. Since then the bank’s repo rate has been lowered by a total of 15.50 percentage points.
In addition to the cut to the refinancing rate, the central bank’s board said the rate on overnight credit would be cut by 75 basis points to 10.75 percent while the rate on overnight deposits would be cut by 25 basis points to 8.25 percent.
All the central bank’s new and lower interest rates will take effect from Aug. 14.
Inflation in Belarus slowed to 5.7 percent in June from 6.2 percent in May and the central bank said its assessment of consumer price growth, which excludes seasonal changes, shows a decline in inflation to below its target of 5.0 percent.
In the previous three quarters, inflation was higher than this indicator, the bank added.
“Further decisions in the field of the National Bank’s key interest rates will depend on the correlation between the inflationary and deflationary factors,” the central bank said.
The National Bank of the Republic of Belarus released the following press release on Aug. 7:
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