Interest rates on rouble deposits will not raise above 35% per annum
At an enlarged meeting, the National Bank to impose higher coefficients on banks’ reserves if their average interest rates on new overnight deposits exceed 35% per annum. Higher coefficients mean that banks’ costs to service such deposits will increase, the National Bank therefore anticipates that banks might reduce their interest rates on deposits. The competition among banks for people’s resources would decline to the benefit of state banks, since they can set the upper limit for deposits and reduce people’s desire to seek a better offer. In May, the National Bank is expected to reduce interest rates on overnight loans to improve business’ accessibility to credit resources. If interest rates for the population fall below 25% per annum they may react with a sharp withdrawal of Belarusian roubles from the banking system.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.