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Belarus National Bank to continue tough monetary policy

February 16, 2012, 17:22 UTC+3

The National Bank of Belarus will continue to pursue a tough monetary/credit budget policy

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MINSK, February 16 (Itar-Tass) — The National Bank of Belarus will continue to pursue a tough monetary/credit budget policy, deputy chairman of the Bank's board Sergei Dubkov said at the 2nd international forum "Capital Market of the Republic of Belarus. Challenges and Opportunities" on Thursday.

"In 2012, the National Bank will continue a tough money supply policy and arrange its refinancing work with banks in such a way as not to allow unscheduled /money/ supply," Dubkov said.

"Loan issues will be carried out under market terms and for a short period. "The stability of the exchange rate will be maintained not by direct interventions of the National Bank, but by the measures within the issuance and interest rate policy.

"The National Bank will continue to pursue the exchange rate policy in "regulatory" mode. This means the exchange rate of the Belarussian rouble will be formed with minimal direct involvement of the National Bank. Currency interventions must be limited, and will only aim at curbing dramatic fluctuations of the exchange rate.

In his opinion, the prognosis to lower the refinancing rate to 20 to 23 percent by the end of 2012 is implementable provided the inflation rate drops to 19 to 22 percent.

Speaking about the strategic tasks the National Bank is facing this year, he underlined the significance of building gold and hard currency reserves at the level which could ensure the country's economic security.

"The minimal task is not to allow a decrease in gold and foreign currency reserves compared with the amount as of early 2012," he said.

Dubkov reminded that in 2011, Belarus increased its gold and foreign currency reserves.

They reached a historical high of 7.9 billion dollars, which is worth two months imports of goods and services.

The banker also noted a considerable volume of liabilities to be met within the next few years. "This means we have to carry out tremendous work to form a real "safety cushion" of the state," he said.

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