Competitiveness inspires speculation

Banking sector forecasts noticeable yet gradual fall in rates for 2013
By Vladimir Khromov

Many view lending and saving rates in Belarus as being too high — especially since most neighbouring states’ rates are many times smaller. Accordingly, it seems likely that both rates will be reduced in 2013 — perhaps even in the first three months, as noted by the Chairman of Bank BelVEB Board, Pavel Kallaur. He notes that change will be gradual though. “It will rely on two factors: the National Bank’s tough monetary-credit policy and a deficit-free budget,” he explains.

At the moment, credit rates at Bank BelVEB (among the top five largest banks in Belarus) fluctuate around the refinancing rate plus 7-10 percent. The gap between the official refinancing rate and those mentioned in advertising is to be cut. “The fall could reach 1 to 3 interest points at some banks; others who have set rates artificially high by applying 15 percent on top of the refinancing rate may see an even more rapid fall of 5-7 percent,” adds Mr. Kallaur.

Speaking of the present situation regarding savings, he emphasises that no dramatic change will be observed immediately. “Exchange rate trends for 2013 are now being formed. Our bank’s plan for 2013 relies exclusively on macroeconomic figures from the National Bank and on the exchange rate forecast by the Finance Ministry (no more than Br8,950 per US dollar),” he asserts.

According to Mr. Kallaur, in 2013, financial establishments will be competing even more for client loyalty. “We’re delighted that bank clients are becoming more discerning, especially since we’ve begun offering diverse new products. As regards consumer and housing loans, we offer a wide choice. In 2013, I think we’ll see even better quality services being provided and quicker decisions from banks. Meanwhile, competition on the retail market will inspire banks to cut their interest rates.”
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