National Bank of Belarus could ease monetary policy in 2027

MINSK. Oct 19 (Interfax) - The National Bank of Belarus (NBB) anticipates potentially lowering the refinancing rate in 2027 and plans to accelerate growth in the money supply and lending, even as it tightens its inflation target, lowering it from 7% this year to a maximum of 6% next year, the NBB said in documents detailing the primary directions for monetary policy for the coming year.

According to the NBB's baseline forecast, the average annual refinancing rate in 2027 should be between 8.6% and 9.25%, "provided there are no risks to price or financial stability." The refinancing rate was lowered from 9.75% to 9.25% per annum in June this year.

The regulator estimates that growth in the average money supply could accelerate to 14%-16% in 2027, up from the 10%-12% projected for this year. In line with this anticipated expansion of the money supply, the NBB plans for an 11%-13% increase in bank claims on the economy next year compared to a 9%-11% range this year, with lending to legal entities projected to grow to 12%-14% from 10%-12% up.

Furthermore, the regulator plans to reduce the cost of investment in 2027and is encouraging banks to issue long-term loans at interest rates below 10%. The average cost of new long-term investment loans should decline to 9.3%-9.8% next year, down from the 10%-12% per annum projected this year.

Regarding the resource base, the National Bank is shifting its focus from the overall share of non-withdrawable deposits toward incentivizing ultra-long-term ruble-denominated resources. A new benchmark will be introduced in 2027, with deposits from individuals with a maturity more than three years to account for at least 10% of the total volume of long-term ruble deposits.