National Bank to determine upper margin of interest rates on loans and deposits
On June 1st, 2015, banks will incur additional costs if they set deposit rates above 33% per annum or issue individual loans at a rate above 46% and corporate loans – above 40% per annum. With its decision, the National Bank intends to stimulate lending to the economy. As a result, interest rates in the banking system will reduce and deposits’ growth will slow down due to the weakening of the national currency in May 2015. In addition, the National Banks anticipates revitalisation of lending to the private sector in the national currency and reduction of net foreign currency sales due to conversion of rouble deposits into foreign currency. The rate on overnight loans is regulated by the National Bank and will continue to decline in the view of potentially negative reaction from the population to reduction in the yield from rouble deposited in the Belarusian 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.