BELARUS NEWS AND ANALYSIS

DATE:

26/06/2008

Belarus ups rate, hopes '08 CPI lower than 10 pct

* Reuters

MINSK, June 26 (Reuters) - Belarussian Economy Minister Nikolai Zaichenko said on Thursday inflation should not exceed 9-10 percent by year-end, though that would be higher than a previous government target of 8 percent.

Earlier, the central bank said it would raise its key refinancing rate to 10.25 percent as of July 1, from 10 percent now, to increase "returns on savings in the national currency".

Belarus, like many of its neighbours, is fighting accelerating inflation which has been boosted by higher prices for staples such as energy and food.

"We are taking measures to keep inflation at minimal levels. We are trying to keep inflation no higher than 9-10 percent," Zaichenko told journalists, blaming inflation on external factors.

Russia has increased gas import prices to Belarus to $119 per 1,000 cubic metres at the beginning of this year from $100 in 2007 when the price was doubled from the previous year, which Zaichenko said knocked inflation into double-digits.

Inflation jumped to 12.1 percent last year, overshooting a government target, against 6.6 percent in 2006. This was still lower than the 16.6 percent reached in neighbouring Ukraine but a touch higher than 11.9 percent in Russia.

Belarus last year received its maiden credit ratings from Moody's and Standard & Poor's, raising foreign investors' interest in the former Soviet state. (Reporting by Andrei Makhovsky; writing by Sabina Zawadzki)

Source:

http://www.guardian.co.uk/business/feedarticle/7611261

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