BELARUS NEWS AND ANALYSIS

DATE:

10/05/2007

Belarussian refinance rate to fall to 9% by year-end - National Bankchairman

MINSK. May 10 (Interfax) - The refinance rate in Belarus will fall to 9% by the end of 2007 from 11% at the moment, National Bank chairman Pyotr Prokopovich said at a press conference in Minsk on Thursday.

According to Prokopovich, the next drop in the refinance rate will take place after monthly inflation reaches 0.6%.

He said that in the first four months of this year the average level of inflation was 0.7% and added that more than likely the refinance rate may be reduced in the coming months.

Prokopovich said that from February 1, 2007 the refinance rate was increased from 10% to 11% due to the need to increase the attractiveness of ruble deposits by the public in conditions of increased demand for foreign currency at the start of this year.

He said that to stabilize the situation on the currency market the National Bank was forced to increase the rate on overnight instruments to support bank liquidity to 20% per year. He also said that the National Bank does not yet plan to reduce the rate on these instruments -"banks should use them only in cases of extreme necessity."

"There is not yet any need to lower this rate, especially as there are currently excess resources in the banking system and the National Bank is mopping up excess liquidity," he said.

Source:

http://www.interfax.com/3/269756/news.aspx

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