Interest rates on foreign currency deposits will continue to reduce despite deposits’ outflow
According to the National Bank, in April 2016, the population reduced foreign currency deposits in the banking system by USD 80 million to USD 7 834.5 million. Over the past six months, Belarusians have withdrawn circa USD 500 million from the banking system. Foreign currency deposits in the banking system are expected to continue to decline, as well as foreign currency lending to the real sector of the economy. Interest rates on foreign currency loans will be reduced and low demand for government securities in foreign currency will be preserved due to their long-term maturity and reduced profitability. Regardless of deposits’ outflow, banks will continue to lower rates on foreign currency deposits due to the lack of sufficient number of reliable foreign currency borrowers and the pressure from the National Bank to reduce public debt servicing costs, in which banks have also invested.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.