Lower discount rate may help Belarusian state-owned enterprises to reduce loan servicing costs
On April 1st, 2016, the National Bank’s discount rate will be reduced from 25% to 24% due to lower inflation expectations. In order to further reduce the cost of loans, reserve payments on attracted funds in national currency will be reduced to 7.5% from 8% and the upper margin for the interest rate on loans in the national currency will be set at 33% per annum. These measures will reduce the cost of loan servicing, for both, standard and soft loans. In addition, legal entities are likely to lose interest in short-term national currency deposits. However, the overall volume of loans is unlikely to increase to due to the economic slowdown and significant arrears on payments for delivered goods and services. Lower discount rate is likely to reduce people’s interest in rouble deposits.
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.