Belarusian economy not overheating, more investment stimulus needed - NBB head

MINSK. March 24 (Interfax) - There are no signs that the Belarusian economy is overheating, on the contrary, the banking sector needs to take additional measures to stimulate business and investment activity, the new governor of the National Bank of Belarus (NBB), former Prime Minister Roman Golovchenko said.

"The National Bank does not currently see signs of so-called overheating of the economy that require tightening of monetary policy. Most indicators are in neutral territory and do not require active steps in the area of monetary policy," Golovchenko said at a meeting with representatives of Belarusian banks in a video clip released by the NBB's press service.

He said monetary policy should create conditions for investment while maintaining macroeconomic equilibrium. However, "reaching a trajectory of sustainable growth requires taking additional measures," such as efforts to increase incentives for long-term savings in the national currency, Golovchenko said.

At the same time, the NBB "will continue to provide assistance in entering foreign markets and establishing relations with foreign banks," Golovchenko said, adding that "this work will be significantly intensified in the near future."

He also said the subsidiaries of foreign banks, including Russian financial institutions, operating in Belarus should step up work with their parent companies on recapitalization with earned profits. In this context, profit should be used by banks as a source of long-term funding, he said.

"The National Bank will take measures of a macroprudential nature to stimulate investment activity and, if necessary, cool excessive consumer demand oriented toward imports. If a liquidity deficit arises at banks, the National Bank will use instruments to refinance banks, which will help reduce interest rates," Golovchenko said.

The "issue of the mismatch in the duration of loans and sources of funding does not indicate a lack of funds for financing investment projects, this is an issue of liquidity management," he said. "Banks have sufficient potential to meet the effective demand of the real sector of the economy."

He also called for expanding the correspondent network in friendly and neutral countries, settlements in the currencies of key trading partners, the use of alternative systems for conveying financial information, and determining optimal arrangements for participants in cross-border payments.

The Belarusian banking system is actively supporting businesses that are involved in foreign economic activities, Golovchenko said, remarking that foreign economic payments carried out by Belarusian banks grew by 6.5% to $96 billion in 2024.

President Alexander Lukashenko appointed Golovchenko governor of the NBB on March 10.