Belarus Central Bank cuts rate 150 bps

The central bank of Belarus cut its benchmark refinancing rate by a further 150 basis points to 23.5 percent due to a continued fall in the inflation rate and inflationary expectations.
    The National Bank of the Republic of Belarus has now cut rates by 650 basis points this year after cutting rates by 1500 points in 2012 in response to lower inflation.
    "The decision was taken with regard to the current tendency for further deceleration of inflation and a decline in inflation expectations," the central bank said, adding the situation on the domestic foreign exchange market remains favorable for a stable exchange rate for the Belarusian ruble.
    Real interest rates remain high, contributing to the inflow of households' deposits to banks and any "further change in the refinancing rate will depend on the macroeconomic situation in the country, as well as the dynamics of prices and inflation expectations," the bank said in a statement from June 7. The new rate takes effect June 10.
    Belarus' inflation rate fell to 20.7 percent in April from 22.2 percent in March as it continues to trend downward from a high of almost 110 percent in January 2012. The country, a former Soviet republic, devalued its ruble by about half during a balance of payments crises in May 2011, sparking inflation.
    The central bank responded by raising interest rates from 10.5 percent in January 2011 to a high of 45 percent in December 2011. But in February last year the central bank started cutting rates.
    This year the central bank expects its refinancing rate to fall to 13-15 percent by the end of the year due to falling inflation.


Belarus cuts rate 150 bps as inflation continues to fall - Central Bank News

for more details visit National Bank of the Republic of Belarus website : http://www.nbrb.by/engl/ 

Latvia Central Bank News

Latvia keeps rate steady, warns of lower growth - Central Bank News

Latvia's central bank left its benchmark refinancing rate steady at 2.5 percent along with its reserve requirements, saying there were no risks to price stability but the risks of lower economic growth has risen and economic policy should take this into account.
    The Bank of Latvia also continued to prepare for Latvia's adoption of the euro on Jan. 1, 2014 by keeping its payments system open for business on Dec. 30 to ensure that all payments, including credit card payments, would be settled before the switch to the single currency.
     Latvia's consumer prices fell by 0.4 percent in April, down from inflation of 0.2 percent in March, continuing the declining trend since May 2011 when the inflation rate hit 4.8 percent.
    "Sustained low inflation rates persist in Latvia and the economic growth rate posts no risks to price stability in the medium term" the bank said.

    Latvia's inflation rate is below that of the euro zone's 1.2 percent and its growth rate much stronger, but the central bank warned that in "the last few months, however, the risk of the economic growth in 2013 moderating in comparison with the previous forecasts has increased," adding:
    "Such possibility should be taken into account when planning the economic policy for the near future."
    Latvia's Gross Domestic Product rose by 1.2 percent in the first quarter of 2013 for annual growth of 3.1 percent, down from a rate of 5.1 percent in the fourth quarter.
    In comparison, the euro zone's economy contracted for the sixth quarter in a row, down by 0.2 percent in the first quarter from the fourth quarter, for an annual decline of 1.0 percent.
    The Bank of Latvia has forecast 2013 growth of 3.6 percent, down from 5.6 percent in 2012.
    As part of preparations for joining the single currency next year, Latvia already joined TARGET2, the euro zone's payments system, in 2007. In TARGET2 more than 1,000 European financial institutions perform real-time payment settlements in euro. Since 2008 the Bank of Latvia's electronic clearing system (EKS) has also been able to handle retail payments in euros.

    www.CentralBankNews.info

Belarus Central bank cuts rate 200 bps

Belarus cuts rate 200 bps, sees lower April inflation - Central Bank News

Belarus cuts rate 200 bps, sees lower April inflation

    The central bank of Belarus cut its benchmark refinancing rate by a further 200 basis points to 25 percent, its third cut this year, saying inflation is expected to be "significantly lower" in April than in previous months, which leaves real interest rates at "a significant positive level."
     The National Bank of the Republic of Belarus, which has cut rates by 500 basis points this year, said a positive trade balance, along with a permanent excess supply of foreign exchange is stabilizing the Belarusian rouble, "and even strengthening it."
    Belarus, a former Soviet republic located between Russia and Poland, devalued its rouble by about half during a balance of payments crises in May 2011, sparking inflation that peaked at almost 110 percent in January 2012. The central bank responded to the surge in inflation by hiking interest rates from 10.5 in January 2011 to a high of 45 percent in December that year.
    Although the inflation rate was still over 100 percent, the central bank started slashing its rate in February 2012, cutting its policy rate by 1500 basis points last year - the largest amount by any central bank in the world - as inflation rapidly fell.
    In March, inflation in Belarus eased to 22.2 percent from February's 22.7 percent.
    In its policy guideline for 2013, the central bank expects its refinancing rate to reach 13-15 percent by the end of this year given the deceleration of inflation.

    www.CentralBankNews.info