OREANDA-NEWS. On 24 February 2009 was announced, that President of Belarus Alexander Lukashenko met with Chairman of the Board of the National Bank Pyotr Prokopovich to receive his report. Pyotr Prokopovich informed the Head of State on the meeting of the targets set forth in the Basic Guidelines for the Monetary and Credit Policy of the Republic of Belarus for January 2009, and on the work carried out by the banking system to meet the Q1 targets.

The Chairman of the Board of the National Bank informed the President that in January 2009 the banking system met all its planned targets for the month. It pertains to the exchange rate, credit, interest rate policy and operation of the payment system.

The exchange rate of the Belarusian rouble rose 3.9 per cent against the currency basket since the beginning of the year and amounted to Br923 as of 18 February. This change was within the five-percent fluctuation range admissible for 2009. This year the National Bank started to pin the Belarusian rouble to the basket of three currencies, U.S. dollar, euro and the Russian rouble.

Within the basket, exchange rates of the currencies change against the Belarusian rouble depending on how the situation changes in the world financial markets. Thus the U.S. dollar has risen nearly 10 per cent against the euro since the beginning of the year, and more than 21 per cent against the Russian rouble. Accordingly, the Belarusian rouble has fallen slightly against the U.S. dollar, while it has risen against euro and the Russian rouble.

Experts at the National Bank believe that the present situation in the world markets is temporary, i.e. the U.S. dollar may start to fall against the euro over time, as well as against the Russian rouble. It may start to fall against the Russian rouble in H2; and as for the euro, the fall may start at any moment, experts say.

‘I believe the situation this year will be more or less the same as it was last year when the dollar first rose against the euro, and then it started to fall, then began rising again. Today it is impossible to predict how stable national currencies of developed countries will be’, said Pyotr Prokopovich.

He has assured the Head of State that in 2009 the National Bank will make sure the exchange rate of the Belarusian rouble will fluctuate within the range of plus-minus five per cent against the currencies basket.

For this, the National Bank will be taking additional measures to strengthen the Belarusian rouble. First of all, it will be increasing the gold and foreign currency reserves. As of 18 February 2009, the reserves have been fully restored to their amount as of 1 January 2009.

The President was informed on the crediting of the real production sector of the economy and the population. As of 1 February 2009, banks issued 6.5 per cent more loans and credits as against the beginning of the year and 1.63 times more loans and credits as against 1 February 2008. Banks issued 1.7 times, or Br82 thousand million, more housing construction loans on privileged terms as against February last year, and 1.7 times more consumer loans.

At the same time, given the world financial crisis, the real production sector needs more credits. Therefore, the National Bank of Belarus is taking measures to make sure lending to businesses is growing at a higher rate.

The refinancing rate is now 14 per cent per annum, up four per cent points from January 2008. The reason for this is that this year inflation is higher than last year. In Q1 the National Bank will not be changing the refinancing rate. Further decisions as to the interest rate policy will be taken by the National Bank in accordance with the results of the country’s economic performance in Q1.

Measures will be taken to cut banks’ interest rates on foreign currency deposits, since the rates are now very high, and there are no economic grounds for that. The National Bank has already prepared recommendations for banks as to how to act in this respect. The National Bank’s experts believe it is now more advantageous to borrow funds abroad at lower per cent rates.

The Head of State said he wanted the banking system to step up lending to the real production sector of the economy, adopt a more balanced per cent rate policy and meet all the monetary and credit targets planned for Q1 2009. Within the next six months the national banking system is expected to reach the level it had 1-2 years ago.