Central bank to raise base refinance rate citing high inflation

June 23, Pozirk. Belarus’ central bank will raise the base refinance rate from 9.5 percent to 9.75 percent, its board has announced. It attributed the measure to high inflation and the need to stimulate investment.

The country’s consumer prices rose by 7.1 percent in the year to May, the National Statistics Committee reported.

Just six months ago, the regulator’s first deputy chairman, Siarhiej Kalečyc, suggested that the NBB would cut its base refinance rate to 9-9.3 percent in 2025 “if there are no risks to prices and financial stability.”

The National Bank of Belarus (NBB) has also announced that the overnight, overnight index swap and fixed-interest Lombard rates will increase to 11.25 percent.

“The macroeconomic imbalance caused by the widening gap between labor productivity and wages is intensifying,” said the central bank governor, Raman Hałoŭčanka.

According to him, higher wages fuel consumption and consumer imports. The latter rose by 14.5 percent in the first four months of 2025, increasing the risk of pressure on the current account.

“Given the emerging upward inflation trend, the NBB board considers it necessary to take decisions aimed at increasing the attractiveness of savings in our economy and, consequently, the growth of the resource base for investment activity,” Hałoŭčanka said.

In his opinion, the measure will encourage savings, reduce inflation and stabilize households’ purchasing power.

The NBB lowered its base refinance rate from 9.75 percent to 9.5 percent on June 28, 2023.

Economy

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