International Monetary Fund supports Belarusian authorities in raising flexibility of exchange rate

The IMF Executive Board has issued a statement declaring that its directors welcome the Belarusian authorities’ intention of making the exchange rate more flexible. They have called for further steps towards exchange rate flexibility, to protect gold-and-currency reserves and ensure adequate adjustment in a volatile external environment. The IMF has also recommended that the National Bank of Belarus fully implement a money-targeting framework focused on reducing inflation to single digits.

Previously, the National Bank announced its intention to move towards greater exchange rate flexibility. In particular, the National Bank is switching to a mechanism of continuous double foreign exchange auction. In 2015, the central regulator introduced a money-targeting framework for the country’s monetary and credit policy. The IMF has called for wage increases to be restricted in 2015, following productivity growth in the medium term. They also note the authorities’ interest in a new Fund-supported programme. Recognising the benefits it could bring to the country, the IMF underscores that any future arrangement would require a credible and strong commitment at the highest level to a comprehensive package of deep structural reform, and consistent macroeconomic policy. They are keen to continue close engagement with authorities on these issues.