“In recent months, inflation has accelerated higher than expected”, National Bank decides on the interest rate

The refinancing rate stays at 7.75% per annum. The decision was taken by the Board of the National Bank of the Republic of Belarus at a meeting on monetary policy on October 14, 2020.

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It was decided to maintain the refinancing rate and interest rates on liquidity regulation operations of the National Bank of the Republic of Belarus at the current level. The financial institution commented on the situation as follows:

– In recent months, inflation has accelerated and formed higher than expected. In September 2020, the annual growth of consumer prices was 6.1%. To a greater extent, this inflation rate was driven by higher prices for imported goods due to the weakening of the Belarusian ruble in August against the background of higher demand for foreign currency.

It is estimated that consumer prices will increase by about 6 percent by 2020. The impact of the weakening of the Belarusian ruble will lead to higher inflation in the short term.

Long-term disinflationary factors are predicted to prevail in the medium term, which will help bring inflation back to its target trajectory of around 5 percent.

The next meeting of the Monetary Policy Board of the National Bank of the Republic of Belarus is scheduled for November 11, 2020. It should be reminded that on October 13 the National Bank extended the suspension of permanently available operations on liquidity support and withdrawal until January 19, 2021 inclusive.