NBB raises refinancing rate by 0.75pp to 8.5% from Apr 21
<p> MINSK, Apr 14 – PrimePress. The National Bank of Belarus (NBB) raised the refinancing rate by 0.75 p.p. to 8.5 percent fr om April 21, 2021. The rates on overnight loans and deposits also increased by 0.75 p.p. to 9.5% percent per annum and 7.5% per annum, respectively. The rates have been adjusted in accordance with the decisions were taken by the Board of the National Bank of Belarus at a monetary policy meeting on April 14. </p> <p> </p> <p> The commentary of the National Bank explains that the decision to raise the refinancing rate was prompted by a number of external and internal factors. “In order to limit pro-inflationary risks and strengthen measures to control money supply, the board of the National Bank decided to increase the refinancing rate by 75 basis points,” reads the commentary. </p> <p> </p> <p> The National Bank notes that at the end of 2020 inflationary processes accelerated. This happened due to the transfer of the effect of the weakening Belarusian ruble onto prices, as well as supply shocks in the markets of some food products. “In early 2021, inflation continued to accelerate under the influence of further increases in global food prices, as well as imported non-food products, whose cost to the consumer has increased due to higher logistics costs and supply disruptions caused by the pandemic,” the report says. </p> <p> </p> <p> At the same time, an additional pro-inflationary impact in the domestic market of Belarus was formed in connection with the abolition of value added tax preferences, said the National Bank. </p> <p> </p> <p> The aforementioned factors against the background of accelerating inflation and its long-term deviation from the 5% level led to the growth of inflation expectations, which is confirmed by the results of opinion polling and enterprise monitoring. As a consequence, the list of goods and services in the consumer basket has expanded and their prices have risen at a higher rate. By the end of March 2021, the increase in consumer prices amounted to 8.5% in annual terms. </p> <p> </p> <p> In order to curb inflation, the National Bank has adopted a set of measures under the monetary targeting regime aimed at tightening control over the money supply. </p> <p> </p> <p> “An elevated inflationary background is expected in the global economy in the near term, due to a number of developed countries pursuing a stimulating monetary policy. Inflation in Belarus' main trading partners is also expected to be high. Thus, according to the forecasts of the Bank of Russia, the growth in consumer prices in the Russian Federation will slow down to the target levels no earlier than the first half of 2022,” reads the commentary. </p> <p> </p> <p> At the same time, the impact of food price shocks, as well as the pandemic consequences in terms of rising costs of imported non-food items, may be more significant for inflation in Belarus. </p> <p> </p> <p> The National Bank notes that these factors in combination form the background for maintaining high inflationary expectations of economic agents for a long time, which increases the risks of maintaining high inflation in the future. </p> <p> </p> <p> At the same time, weak consumer and investment demand within the country will somewhat lim it inflation. </p> <p> </p> <p> As previously reported, during the sessions held on October 14 and November 11, 2020, the National Bank decided to keep the refinancing rate at 7.75% per annum and the rates on the credit and overnight deposit at 8.75% and 6.75% per annum, respectively. </p> <p> </p> <p> Last time, the NBB lowered the refinancing rate on July 1, 2020 by 0.25 percentage points to 7.75% per annum. Earlier, the refinancing rate was lowered on May 20, 2020 by 0.75 p.p. to 8% per annum; on February 19, 2020 by 0.25 p.p. to 8.75% per annum; on November 20, 2019 by 0.5 p.p. to 9% per annum; on August 14, 2019 by 0.5 p.p. to 9.5% per annum; on June 27, 2018 by 0.5 p.p. to 10% per annum; on February 14, 2018 by 0.5 p.p. to 10.5% per annum. In 2017, the National Bank lowered the refinancing rate eight times by 7 percentage points in total to 11% per annum. End </p>
2021-04-15
Primepress
NBB raises refinancing rate by 0.75pp to 8.5% from Apr 21
MINSK, Apr 14 – PrimePress. The National Bank of Belarus (NBB) raised the refinancing rate by 0.75 p.p. to 8.5 percent fr om April 21, 2021. The rates on overnight loans and deposits also increased by 0.75 p.p. to 9.5% percent per annum and 7.5% per annum, respectively. The rates have been adjusted in accordance with the decisions were taken by the Board of the National Bank of Belarus at a monetary policy meeting on April 14.
The commentary of the National Bank explains that the decision to raise the refinancing rate was prompted by a number of external and internal factors. “In order to limit pro-inflationary risks and strengthen measures to control money supply, the board of the National Bank decided to increase the refinancing rate by 75 basis points,” reads the commentary.
The National Bank notes that at the end of 2020 inflationary processes accelerated. This happened due to the transfer of the effect of the weakening Belarusian ruble onto prices, as well as supply shocks in the markets of some food products. “In early 2021, inflation continued to accelerate under the influence of further increases in global food prices, as well as imported non-food products, whose cost to the consumer has increased due to higher logistics costs and supply disruptions caused by the pandemic,” the report says.
At the same time, an additional pro-inflationary impact in the domestic market of Belarus was formed in connection with the abolition of value added tax preferences, said the National Bank.
The aforementioned factors against the background of accelerating inflation and its long-term deviation from the 5% level led to the growth of inflation expectations, which is confirmed by the results of opinion polling and enterprise monitoring. As a consequence, the list of goods and services in the consumer basket has expanded and their prices have risen at a higher rate. By the end of March 2021, the increase in consumer prices amounted to 8.5% in annual terms.
In order to curb inflation, the National Bank has adopted a set of measures under the monetary targeting regime aimed at tightening control over the money supply.
“An elevated inflationary background is expected in the global economy in the near term, due to a number of developed countries pursuing a stimulating monetary policy. Inflation in Belarus' main trading partners is also expected to be high. Thus, according to the forecasts of the Bank of Russia, the growth in consumer prices in the Russian Federation will slow down to the target levels no earlier than the first half of 2022,” reads the commentary.
At the same time, the impact of food price shocks, as well as the pandemic consequences in terms of rising costs of imported non-food items, may be more significant for inflation in Belarus.
The National Bank notes that these factors in combination form the background for maintaining high inflationary expectations of economic agents for a long time, which increases the risks of maintaining high inflation in the future.
At the same time, weak consumer and investment demand within the country will somewhat lim it inflation.
As previously reported, during the sessions held on October 14 and November 11, 2020, the National Bank decided to keep the refinancing rate at 7.75% per annum and the rates on the credit and overnight deposit at 8.75% and 6.75% per annum, respectively.
Last time, the NBB lowered the refinancing rate on July 1, 2020 by 0.25 percentage points to 7.75% per annum. Earlier, the refinancing rate was lowered on May 20, 2020 by 0.75 p.p. to 8% per annum; on February 19, 2020 by 0.25 p.p. to 8.75% per annum; on November 20, 2019 by 0.5 p.p. to 9% per annum; on August 14, 2019 by 0.5 p.p. to 9.5% per annum; on June 27, 2018 by 0.5 p.p. to 10% per annum; on February 14, 2018 by 0.5 p.p. to 10.5% per annum. In 2017, the National Bank lowered the refinancing rate eight times by 7 percentage points in total to 11% per annum. End