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Belarus' central bank to reduce refinancing rate to 11.5% on 23 January

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MINSK, 18 January (BelTA) – The National Bank will reduce the refinancing rate from 12% to 11.5% per annum on 23 January 2023. The corresponding decision was made by the Board of the National Bank following the meeting on monetary policy, BelTA learned from the National Bank.

The interest rate on overnight loans will be decreased from 13% to 12.5%, with the interest rate on overnight deposits down from 11% to 10.5% per annum.

"In recent months, there has been a steady slowdown in inflation. In December 2022, the annual increase in consumer prices amounted to 12.8%, the aggregate trend inflation indicator was 10.2% per annum. Such dynamics of consumer prices has had a positive effect on inflation expectations of economic agents. According to the surveys, the consumer inflation expectations in the next 12 months decreased to 12.6% in December 2022 from 14% in September 2022," the bank said.

It is reported that, in general, the improvement of consumer inflation expectations contributes to the preservation of the inflow of rubles into the banking system. At the same time, with interest rates going down in the deposit and credit markets, savings activity remains restrained, including due to increased inflation expectations. Under these conditions, taking into account the expected further slowdown in inflation, the Board of the National Bank decided to reduce the refinancing rate by 50 basis points.

While making decisions on the refinancing rate in the future, the National Bank will take into account the actual and expected inflation rates, internal and external risks and the reaction of financial markets to them.

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