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PRESIDENTIAL DECREE OF THE REPUBLIC OF BELARUS

of December 31, 2017 No. 470

About approval of the Main directions of monetary policy of the Republic of Belarus for 2018

1. Approve the Main directions of monetary policy of the Republic of Belarus for 2018 (are applied).

2. To provide to National Bank together with Council of Ministers of the Republic of Belarus accomplishment of the Main directions of monetary policy of the Republic of Belarus for 2018.

3. This Decree becomes effective since January 1, 2018.

President of the Republic of Belarus

A. Lukashenko

Approved by the Presidential decree of the Republic of Belarus of December 31, 2017 No. 470

The main directions of monetary policy of the Republic of Belarus for 2018

Chapter 1. Monetary policy purpose

1. Monetary policy will keep strategic orientation on ensuring price stability as basis of the sustainable and balanced development of economy of the Republic of Belarus.

Restriction of the inflation measured by consumer price index in the amount of no more than 6 percent (December, 2018 by December, 2017) will become main objective of monetary policy in 2018.

Chapter 2. Monetary policy realization

2. In 2018 carrying out monetary policy in the mode of monetary targeting will continue. The wide money supply will remain its intermediate reference point. The surplus of average wide money supply is predicted at the level of 9–12 percent (December, 2018 by December, 2017).

Within transition in the medium-term period to the mode of inflation targeting the operational reference point will be changed: since 2018 instead of ruble monetary base use of interest rate for daily interbank credits is provided in national currency.

3. The percentage policy will be pursued taking into account need of achievement of target indicator on inflation. When forming favorable conditions the orientation of percentage policy on gradual decrease in nominal interest rates in economy will remain. In real terms interest rates are planned to be supported at the positive level promoting growth of savings in national currency, to ensuring financial stability, sustainable development of economy.

Work on increase in efficiency of functioning of the percentage channel of the transmission mechanism of monetary policy by means of enhancement of approaches to liquidity management of banks and strengthening of coordination of monetary and budget policy will be continued.

4. The main instrument of regulation of current liquidity of bank system will be the regular transactions which are carried out on auction basis according to the approved schedule in the public market which parameters will be set proceeding from need of achievement of operational reference point.

5. Enhancement of course policy will be harmonized with transition to the mode of inflation targeting. The basis of this process will be constituted by further increase in flexibility of the national currency rate which dynamics will continue to be created under the influence of fundamental macroeconomic factors and measures economic, budget and tax and monetary policy.

6. Taking into account repayment by the Government of the Republic of Belarus and National Bank of internal and external obligations in foreign currency the international reserve assets for the end of 2018 will constitute at least 6 billion US dollars.

Due to reduction of amount of currency obligations and acquisition of foreign currency by National Bank in case of steady excess of the offer of foreign currency in the domestic foreign exchange market over demand for it improvement of structure of the international reserve assets will be provided.

Chapter 3. Ensuring banking system stability

7. The National Bank in 2018 will continue to exercise control of observance by banks of requirements to size and sufficiency of the normative capital, including due to implementation and gradual increase in value of the conservation buffer. Assessment of stability of banking sector will be carried out taking into account results of the independent quality evaluation of assets of banks and measures taken by banks following the results.

For decrease in level of systemic risks of banking sector and the prevention of their education implementation of practice of establishment of separate prudential requirements for the banks carried to systemically significant including increased requirements to sufficiency of their normative capital (the buffer of the system importance) is provided. For the purpose of restriction of the systemic risk resulting from deterioration in financial condition of the largest debtors (systemically significant borrowers) banks, the raised risk degree when calculating sufficiency of the normative capital of bank will be applied to their credit debt and securities.

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