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.
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.