Belarus’s governor predicts inflation will fall

Belarus’s central bank governor Pavel Kallaur predicted the country’s inflation will soon come down from its current double-digit rates.

“Our forecasts are optimistic. We expect that the inflation has passed its peak and will be slowing down gradually,” said Kallaur, according to a report from official wire service Belta on October 24.

Consumer price index inflation was 17.4% year on year in September, according to official figures. The central bank raised its refinancing rate by 275 basis points to 12% on February 28, shortly after Russia invaded Ukraine.

The US first imposed sanctions on Belarus in 2006. The country has come under additional sanctions from most major economies this year, after Russian troops were permitted to invade Ukraine from Belarus.

The governor added that he expected interest rates would fall, and said the balance of payments was positive. He acknowledged that foreign exchange deposits had fallen “by about half a billion dollars”, but said that exports sales had compensated.

Kallaur’s comments come less than three weeks after Belarusian president Aleksandr Lukashenko decreed a price freeze in the country. The measure prohibited any price increases without the approval of government officials. 

On October 20, the government substituted a system of price controls for the initial freeze on price increases. According to Belta, the new rules forbid markups and require government approval to raise prices or conduct barter transactions.

Kallaur has been governor of the National Bank of the Republic of Belarus since December 2014.