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Belarus’ central bank eager to reduce inflation to 4% after 2020

MINSK, 27 March (BelTA) – The National Bank of the Republic of Belarus (NBRB) is intent on reducing inflation to 4% after 2020. Deputy Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Sergei Kalechits made the statement as top officials of the country’s central bank met with MPs on 27 March, BelTA has learned.

The official said: “The current five-year program aims to reduce inflation to at least 5% as of late 2020. In the future it may be a good idea to think about the possibility of reducing it to 4%.”

It is this level of inflation – 4% -- that the central banks of Russia, Kazakhstan, and Armenia, which are Belarus’ partners in the Eurasian Economic Union, intend to achieve in the medium term. “In order to secure a competitive advantage, we should offer business operation terms at least as good as theirs. As for the macro level, we are talking primarily about steadily low inflation,” noted the deputy head of Belarus’ central bank.

Speaking about the optimal level of inflation, Sergei Kalechits explained that depending on the degree of development of a national economy the annual inflation of 1% to 5% enables the most appealing conditions for economic growth. In developed economies with a rather lengthy period of stable prices, with low inflation expectations and a high trust in the national currency and the policy pursued by the monetary authorities as a whole the medium-term inflation target stands at 1-3%. In developing countries and countries with nascent markets the inflation target is usually 1-2 percentage points above that due to a number of reasons.

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