Refinancing rate in Belarus. The National Bank of the Republic of Belarus

The refinancing rate of the Republic of Belarus is interesting not only for the residents of this country. This topic is of interest to all who are interested in macroeconomic policies. It's not a secret for anyone that the level of inflation in a fraternal country is prohibitive. All Belarusians until recently were millionaires. The situation is similar to the one that was in Russia. At one time, 6 zeros were also deposited on bills. So, what determines the refinancing rate in Belarus? We will try to understand.

What is the refinancing rate

The refinancing rate is the main indicator by which the macroeconomic situation in the country is determined. It shows, under what percentage gives the Central Bank money to commercial banks. The higher the rate, the more expensive the loans for the population and business. After all, commercial banks will not give money to citizens at a loss. But the refinancing rate will not be lower than inflation in the country.

The situation before the denomination

The situation with millionaires and billionaires in the country worried all for a long time. It was possible to see on the Internet various flash mobs, when students bought "soda" for a suitcase of money. The inflation rate was so high that the refinancing rate in Belarus reached 26%. In this situation, two paradoxical things occurred:

1. The growth of inflation, which times "jumped" the mark of 30% per annum.
2. The authorities' prohibition to increase the nominal value of the notes.

What does it mean?

Economics is useless to order. You can not "ban" inflation by administrative methods, no matter how good intentions may arise. But what does inflation mean in 30%? Russians living in the nineties of the last century, have forgotten about it. The crisis of 2016 has refreshed the memory a little. Inflation of 30% means that for money hidden under the pillow, today, in a year, you can buy one-third less goods.

For example, let's take a TV sale. Its price is 10 thousand Russian rubles. With inflation of 30%, the cost of this TV will increase by at least this amount. In a year the price will be 13 thousand rubles. And the citizen "under the pillow" is only 10. Consequently, now he can buy a TV, and a year later he will not be missing 3 thousand rubles. On the same model.

In fact, the price is affected by many conditions: factors of production, the balance of supply and demand, etc. But inflation is one of the main reasons for pricing. The refinancing rate in Belarus directly depends on it (and not only in it).

The ban on increasing the nominal value of the notes generates a situation when the population is forced to go with bags instead of purses to the store. Imagine, the price of the refrigerator is several million, and the maximum bill is 100 rubles.

Of course, there is no better incentive for switching to e-commerce, but middle-aged and elderly people are distrustful of it. The situation had to be changed.

"Strange" denomination in Belarusian

July 1, 2016, there was an event that was predicted for several years. There was a denomination. In simple terms, zeros have been "crossed out".

But the denomination was called "strange". The Belarusian ruble lost 4 zeros at once. Instead of a million, there were 100 rubles, instead of 1 thousand - 10 kopecks.

Causes

There are two reasons for such a denomination:

1. A belated reform. The denomination had to be held earlier.
2. Forecasting the growth of inflation. This means that the refinancing rate in Belarus will be even higher in the future.

Macroeconomic situation after the denomination

Be that as it may, but after the "truncation of zeros" the situation has changed a little. The refinancing rate of the national bank of the Republic of Belarus has now dropped to 20%. This became possible due to a slowdown in inflation.

Factors affecting the size of the refinancing rate in Belarus

1. Inflation.
2. Macroeconomic policy of the state.
3. The price of oil and oil products.
4. Macroeconomic situation in Russia.

What does Russia have to do with it?

If the inflation and the macroeconomic situation in the Russian Federation are heavily influenced by the prices of hydrocarbons (the events of recent years have confirmed this), in Belarus they depend on the situation in Russia.

Let's explain on a concrete example. Almost the entire economy of the fraternal republic is based on trade relations with Russia. And then a paradoxical situation. Belarus sells hydrocarbons to Russia for hundreds of billions of dollars. Some Russian citizens are likely to be outraged, they say, how? It can not be like this!

But refining oil in gasoline is cheaper in a fraternal republic. This is due to the following factors:

1. The policy of both states in the field of fiscal policy.
2. Customs duties.
3. Wage level.

That is, the situation is such that it is cheaper to take oil from Russia to Belarus for processing to gasoline than in Russia.

If the macroeconomic situation in the Russian Federation worsens, then it affects Belarus.

The authorities of the fraternal republic have already stated that the devaluation in Russia will not affect Belarus in any way. But experts note that today's denomination is just evidence of the deterioration of the situation.

Psychologically, the price increase is less noticeable. Compare the growth by 1000 rubles or 10 kopecks. Similar was in Russia in the late 90's. Early 2000's.

From July 1, export duties on oil and oil products, on crude oil, on straight-run gasoline, on commodity gasolines increase. Where does Belarus get it? That's right, the resale and processing of raw materials from Russia. By the way, the brotherly country officially received permission to resell the crude oil of Russia to other countries.

The economy of Belarus keeps on this rather than BelAZ, MTZ and potatoes. To be fair, we say that most of these products are also sold in Russia. Therefore, the deterioration of the economic situation in the Russian Federation can not affect Belarus.

From the recent speeches of President Lukashenko, it is clear that the agricultural products of the "good neighbor" in Russia are least likely to be seen. There are various administrative barriers. The devaluation of the Russian ruble hit the Belarusian economy two times. The price of agricultural products in Russia fell by half (in real terms, but not in nominal terms), which made Belarusian goods not as acceptable as before. Producers from Belarus have to reduce the cost, which reduces the country's budget.

The loss of income is a deficit. Fulfillment of social obligations "forces" to print money. And this accelerates inflation, which, in turn, determines the refinancing rate of the currency in Belarus. A clear domino principle.

Crisis in Belarus

The deterioration of the economic situation is also indicated by the following facts that occurred after June 1, 2016:

1. Some types of cigarettes have risen in price.
2. Export duties on oil products have increased, as we mentioned above.
3. Denomination of the national currency.

Such measures, as they say, are not from a good life. Belarus is one of the few countries that tries not to tighten fiscal policy and not to increase taxes and fees.

History of denominations

In Belarus, the denomination since July 1, 2016 is not the first for the recent history of independence:

1. The first was connected with the transition from Soviet rubles to the national currency of Belarus. The country did not come up with its name, left the former name - the ruble. For 10 old Soviet in 1992, 1 new Belarusian was given. In 1994, due to inflation, one zero was removed.
2. The second one was held in 2000. The currency this time "lost weight" by three notches.
3. The third occurred in July 2016. Now the Belarusian ruble lost four zeros at once.

Such measures indicate that the authorities can not overcome inflation in the country. And this directly affects the refinancing rate, which, we recall, is now 20%.