National Bank head does not rule out rubel redenomination next year

 

There may be a redenomination of the Belarusian rubel in 2014 if this year's inflation rate did not exceed the projected limit of 12 percent, Nadzeya Yermakova, head of the National Bank of Belarus (NBB), said on Wednesday during a phone-in interview hosted by the government-controlled newspaper Narodnaya Hazeta.

Consumer prices reportedly increased by 6.6 percent in the first five months of 2013, rising by 5.4 percent between January and March, by 0.5 percent in April and by 0.7 percent in May.

According to the economy ministry, the acceleration of inflation in the first five months was due to the introduction of value-added tax on providers of telecommunications services, an increase in excise tax rates, and a rise in the prices of goods and services subject to price restrictions.

Economists predict that the government may meet its 12-percent inflation target if it continues to pursue a tight monetary policy, and if the situation in the exchange market remains stable.

There have been two currency redenominations in the history of independent Belarus, in August 1994 and January 2000.

In 2000, the National Bank sliced three zeroes off the rubel and put into circulation new 1-, 5-, 10-, 20-, 50-, 100-, 500-, 1,000- and 5,000-rubel notes. The old notes were legal tender until January 1, 2001.

On March 12, 2012, the National Bank introduced a new banknote of 200,000 rubels, twice as much as the previous largest denomination of 100,000 rubels.

According to the National Statistics Committee (Belstat), consumer prices in Belarus increased by 1.2 percent in February 2013 and by 4.3 percent in the first two months of the year. //BelaPAN