Head of IMF mission Chris Jarvis, summing up the mission to Belarus on October 5-17, stated of the need to tighten the country’s economic policy. IMF recommends to the Belarusian authorities to restrain spending and to freeze the state programs.
Chris Jarvis called the refinancing rate increase, as well as measures to reduce inflation among the priorities to be addressed by the authorities of Belarus, BelTA informs.
Chris Jarvis pointed out that reduction of the current account deficit, which was reached through devaluation, may be lost due to inflation. Head of IMF mission stressed that measures to reduce inflation are necessary to achieve external and internal stability.
IMF: Interest Rates must Exceed Expected Inflation Rate
According to Chris Jarvis, NBB should increase interest rates to levels higher than expected inflation. It should be done for investors to feel confident that their savings will be profitable in future.
In addition, the IMF urges the Belarusian authorities to restrain the growth of wages, without raising first-class rates for state employees.
In general, according to Chris Jarvis, a policy of the Belarusian authorities to curb the crisis is developing "in the right direction." In particular, the head of IMF mission welcomed the recent decision to unify the basic and additional sessions of the Belarusian Currency and Stock Exchange.
"Yesterday's statement of the authorities on plans to unify fx rates at the market rate level and to use a floating rate of Belarusian ruble is another important step forward," said Chris Jarvis.
Trading on the Belarusian Currency and Stock Exchange will be held within a single session from October 20. This was reported by Deputy Prime Minister of Belarus Sergei Rumas on October 15.