Tightening of monetary policy
The National Bank of Belarus on 1 June 2011 raised the refinancing rate by 2 % to 16% per annum.
Moreover, the government decided to stop granting preferential loans for the acquisition of Belarusian goods. Preferential loans for the purchase of Belarusian goods are issued by JSC “Belarusbank”, Belinvestbank, JSC “BPS-Bank”, Belagroprombank for up to three years at an annual rate of 10%.
While tightening the monetary policy, as well as bearing in mind the rising prices, the NBoB consistently raises interest rates, including the deposit IRs. However, restoring confidence in the banking system and stemming the outflow of deposits is only feasible after the stabilization of the situation on the foreign currency exchange market. Currently, the situation remains tense, although not critical for the banking system.
The Government should continue reducing the gross domestic demand via suspension of various schemes of concessional lending to enterprises and population, while the National Bank should continue raising interest rates.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.