OREANDA-NEWS. January 17, 2013. The interest rate policy pursued by the National Bank of Belarus (NBB) was the major instrument for restraining inflation growth in Belarus in 2012.

The NBB made a statement to this effect in its monetary management report for 2012 posted on the bank’s web site.

Consumer prices grew 21.8% in 2012 to compare with a 108.7% hike in 2011, the bank said.

Although the refinancing rate reduced gradually during the year, it still remains fairly high at 30% per annum. The refinancing rate was used as an instrument to balance interest rates on the credit and deposit market, the NBB said.

To keep consumer prices under control in 2012, the NBB would pursue a tough monetary management policy, with interest rates sustained at a high level, banks refinanced on market principles, mandatory reserve requirements raised.

Belarusians’ time deposits denominated in Belarusian rubles have expanded by 5.8 trillion rubles (USD 673.635 million) since 2012, while hard-currency deposits grew by USD 1.9 billion. The situation on the foreign exchange market remained stable partly due to improvements in foreign trade. FX proceeds expanded from USD 41.8 billion in Jan-Nov 2011 to USD 46.7 billion in Jan-Nov 2012, the NBB informed.

The exchange of the Belarusian ruble became more flexible: by selling or purchasing foreign exchange on the FX market, the central bank would mitigate broad fluctuations of the exchange rate. The Belarusian ruble in 2012 lost 2.6% to the U.S. dollar, 5% to the euro and 8% to the Russian ruble, the NBB said.

Belarus’ gold and FX reserves expanded by USD 179 million in 2012 to reach USD 8.1 billion as of January 1, 2013.

Belarus continued fruitful discussions with the EurAsEC Financial Bailout Fund and the IMF in 2012 with an eye to developing economic stabilization solutions for Belarus.

The progress made in 2012 is another step in a series of successive actions aimed at sustaining price stability and economic growth in Belarus, the NBB said.