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March 27 – April 2, 2017

Discount rate will drop to 11% in 2017

The situation has not changed

As of April 19th, 2017, the National Bank will reduce the discount rate from 15% to 14% due to a slowdown in inflation. In 2017, the discount rate reduction occurred every month by 1 percentage point. That said, by the year-end, the discount rate was projected at 14%-16%. Interest rates on loans for private persons and corporations are likely to continue to reduce, so as profitability of deposits in both, national and foreign currency. However, demand for loans is unlikely to step up due to persisting fears among banks to accumulate bad debts on loans and the lack of sufficient number of quality borrowers in the economy. If the current trend persists, and due to the industry’s pressure on the government to reduce loan burden on enterprises, the discount rate is likely to continue to reduce and may fall to 11% by the year-end.

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