NBB Increased Refinancing Rate to 10.75% from 10.5% on October 15
OREANDA-NEWS On 21 October was announced, that the National Bank of Belarus (NBB) plans to increase its refinancing rate to 10.75% on October 15, 2008 from 10.5% currently. The central bank signed resolution #143 on October 7 to approve the increase in the key rate.
The NBB has raised the benchmark rate twice so far in 2008, both times by 0.25 percentage points.
The move will result in higher deposit rates, which is expected to encourage savings in the national currency.
The NBB plans to keep interest rate at levels that would promote retail and corporate deposits with domestic banks.
Higher deposits will expand the resource base of domestic banks and facilitate banks’ efforts to meet the demand for banking services.
Belarus’ refinancing rate will go up to 11%-14% by year-end 2008 (with Belarus’ Economy Ministry’s inflation forecast for this year standing at 14%), according to the new version of the draft Monetary Guidelines for 2009.
As a result, the average interest rate on new loans will reach 14%-17%, and the average annual deposit rate will settle between 11% and 14%.
The 10.5% refinancing rate was set on August 13, 2008.