National Bank’s discount rate reduced
The situation has not changed
The National Bank of Belarus reduced the discount rate to 38% per annum from 43% per annum on 1 March 2012.
This is good news for borrowers, as the existing rates are in effect prohibitive. At the same time, interest rates on loans are not reduced as fast and on average constitute 50-55% per annum. At the same time, gradual and substantial reduction of the discount rate threatens the stability of the banking system and the foreign exchange market: there is danger that the population of the country will start withdrawing money from ruble deposits (interest rate is linked to the discount rate) and exchange into foreign currency (at the moment the population only sells foreign currency).
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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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