Belarus' central bank optimistic about inflation prospects

"The government and the central bank are taking measures to reduce the inflation. Our forecasts are optimistic. We expect that the inflation has passed its peak and will be slowing down gradually. The process of reducing interest rates on loans will continue accordingly. All this together creates normal conditions for the real sector of the economy in terms of access to loans," the head of the National Bank said.

According to him, the situation in the economy necessitated rising the interest rates on deposits in order to "encourage people to keep their savings deposits. And this strategy has worked. "Interest rates on Belarusian ruble deposits outpace inflation. Dynamics is small, but stable,” Pavel Kallaur noted. “Foreign currency deposits have shrunk by about half a billion dollars. But the banking system did not need these resources, since enterprises earned foreign exchange earnings in the foreign market and reduced loan burden in foreign currency.”

Today is a unique situation. The rate on newly issued loans is lower than the inflation rate: for example, 14.06% per annum on a loan, which means minus 2.75% in real terms, taking into account inflation.

"This year, the economy is running a positive balance of payments. Enterprises and the country received $2.1 billion in revenue in January-September, which was used by enterprises partly to repay external accounts payable, partly to repay loans of Belarusian banks in foreign currency. There was also a good profitability in the real sector of the economy - about Br12.5 billion in profit on a net basis. This, too, allowed enterprises to solve their problems on their own. Thus, the situation is good. Solvent demand, especially in Belarusian rubles, is satisfied by the banking system. Loans in foreign currency have decreased, which, in fact, is a very positive thing," the head of the National Bank said.

"From the point of view of access to loans, solvent enterprises have no problems with it," he added.