National Bank of Belarus will maintain continuity of monetary policy in coming years with inflation target of 5%

MINSK. June 20 (Interfax) - Monetary policy in Belarus will maintain its continuity for the next several years, with the goal of keeping inflation within 5%, Head of the country's National Bank Pavel Kallaur said in parliament.

"Monetary policy will maintain its continuity for the next several years. The key task is to reach the inflation parameters provided for in the five-year program, and their sustainable consolidation in the future at a lower level. Let me remind you that for the current five-year period [2021-2025], the inflation target was set at 5%," Kallaur said.

He said that this year inflation should not exceed 6% as per the target forecast.

Commenting on the key guidelines for future monetary policy, the head of the National Bank said that interest rate policy would remain focused on ensuring the attractiveness of savings in the national currency, which forms the resource base of banks for the financing of the economy. "Also, in order to form a stable resource base for banks necessary to expand lending, measures will be taken to develop the long-term deposit market, as well as to increase the share of ruble savings," he said.

The NBB has been implementing monetary policy using a monetary targeting regime since 2015. With this approach, the central bank ensures price stability by achieving certain money supply indicators. Previously, the National Bank planned to switch to an inflation-targeting regime in 2020, but subsequently abandoned these plans due to increased government price regulation and insufficient institutional independence for an inflation-targeting regime to work.