National Bank of Belarus withdraws 40% more liquidity in April
MINSK. May 14 (Interfax) - The National Bank of Belarus withdrew an average balance of 8.7 trillion Belarusian rubles (Br 8,170/$1 on May 14) in excess liquidity from commercial banks in April, 37.6% up on March, statistics published by the National Bank show.
The withdrawal balance in March increased 130% on February.
The National Bank has not provided commercial banks with issue liquidity since February, including through swap and one-day loans and it continues ot carry out large-scale liquidity sterilization.
In April, as in March, the main channel for withdrawing excess liquidity were fixed-rate deposits, turnover for which reached Br 84.5 trillion, 11.2% down on March. Average bank deposit balances in the National Bank fell 7.3% to Br 4.4 trillion. The average interest rate on National Bank deposits slid in April to 24.68% from 30% per annum in March. The term of balances was 2.28 days, compared to 2.32 days in March.
The turnover of National Bank of Belarus short-term bond fell 61.4% from the previous month in April to Br 1.59 trillion, but the average balance on the instrument climbed 170% to Br 4.29 trillion, while balance interest fell to 28.56% from 30% and the balance term went down to 43.66 days from 54.05 days in March.
The National Bank of Belarus toughened its monetary-financing policy in the fourth quarter of 2011, minimizing resource issue support for government banks after a peak in liquidity support in July-September. Interest rates on liquidity support instruments climbed from 16% to 70% per annum in 2011. The surge was due to a large increase in bank deposits and surplus conversion of foreign currency into Belarusian rubles, which caused a drop in interbank loan market rates from February. Interbank loan market rates were 22% to 23% in early May, compared to 56% in January. The National Bank of Belarus will on May 16 lower interest rates on liquidity withdrawal instruments to 20% from the 30% set in December. Interest rates on liquidity instruments remain inaccessible to banks at 55% per annum.
The National Bank of Belarus estimates that surplus ruble liquidity at the start of May was around Br 7 trillion to 8 trillion.
