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November 17 – November 23, 2014

Lower interest rates will mean lower profits in banking business

The situation has not changed
Lower interest rates will mean lower profits in banking business

On November 12th during a debriefing about the economic performance results in 2014 the National Bank was tasked to optimise costs and salaries in the banking sector. Wages in the Belarus’ banking sector are the highest throughout the country. The current level of interest rates is among the limiting factors for economic development. Most likely, some regulations might be adopted which would restrict costs in the banking sector, banks may be prompted to provide loans to state-owned enterprises at reduced interest rates, and overdue loan payments might be extended on favourable conditions. If banks do not change their interest rate policy, administrative pressure may increase on some of them, including inspections of their current activities and their conformity with the legislation.

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