National Bank: Current macroeconomic situation stable enough to relax monetary policy

<p> MINSK, Jul 30 - PrimePress. The National Bank of Belarus (NBB) may allow easing the monetary policy easing in the current situation of macroeconomic stability. At the same time, even amid external shocks caused by the coronavirus pandemic, there are no preconditions for the country to re-live the 2011 and 2014 crisis scenarios. </p> <p>   </p> <p> Deputy Chairman of the National Bank of Belarus Sergey Kalechits made a statement to this effect in an interview published in the newspaper Respublika. </p> <p>   </p> <p> According to Kalechits, the transition to monetary targeting and flexible exchange rate formation in the monetary policy pursued by the National Bank and the government since 2015 have largely ensured price stability and macroeconomic balance. “Thus, a certain buffer of macroeconomic stability has been created, which today allows relaxing the policy without violating the stability achieved,” he said. </p> <p>   </p> <p> According to Kalechits, this opportunity reflects the dynamics of monetary indicators, which generally correspond to the forecast parameters and macroeconomic situation. "The year-on-year growth of the average broad money supply is 15.1%, without taking into account the change in the exchange rate of the Belarusian ruble - 6.3%," he said. </p> <p>   </p> <p> At the same time, in his view, easing the monetary policy in the current situation is a justified measure and does not contain the prerequisites for the 2011 and 2014 crisis scenarios. </p> <p>   </p> <p> As previously reported, the possibility of easing monetary policy has been discussed twice recently at the meetings held by Belarus President Alexander Lukashenko with the management of the National Bank. </p> <p>   </p> <p> On June 19, the need for such a step was justified by the situational motivation at the meeting on measures to support the real sector. In particular, Lukashenko demanded to use all instruments to replenish the resource base of banks: deposit auctions of the Ministry of Finance, weakening the reserve requirements of the National Bank to maintain liquidity, as well as the profit of the banking system. The replenished resource base, according to the president, should be used as credit support to the real sector. </p> <p>   </p> <p> On July 20, as part of the procedure to appoint new members of the NBB Board, President Lukashenko met up with the senior management of the National Bank to discuss long-term investment planning with the mobilization of domestic resources, which implied adjusting the monetary policy. </p> <p>   </p> <p> In particular, Lukashenko noted that investments will be declared a priority for the next five-year period (2021-2025). In this regard, he urged the National Bank to look for new ways of attracting cheap long-term credits, which is necessary to finance investment projects with a payback period of 7-10 years. </p> <p>   </p> <p> Lukashenko also said that he had set a task for the government to get the economy growing at an average global GDP rate as early as 2021, as well as to prevent economic decline in 2020. He believes it is necessary to use “any opportunity to move forward”, and expects from the National Bank “more active participation in this process”. </p> <p>   </p> <p> As previously reported, Belarus’ GDP decreased by 1.7% year on year in January-June 2020 to Br66.3 billion ($27.419 billion at the rate of National Bank of Belarus). In 2019, Belarus’ GDP rose by 1.2% to Br131.952 billion ($54.570 billion; $1 - Br2.418), while the official forecast provided for 4% growth. End </p>

2020-07-31

Primepress