Tightening of monetary policy

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April 22, 2016 17:54

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%.

Comment

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.

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President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.

President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.

The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.

The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.

The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.