Commentary to Decree No. 234 of 18 May 2012

    President of Belarus Aleksandr Lukashenko has approved the National Bank report for 2011. Aleksandr Lukashenko signed relevant decree No. 234 on 18 May.

    The annual report covers the National Bank’s actions and financial performance.

    In 2011 the exchange rate of the Belarusian ruble was under pressure due to the rising foreign trade deficit and the domestic demand for foreign currency outstripping the supply.

    In these conditions the National Bank switched to managed floatation of the national currency exchange rate and started pursuing a hardline monetary management policy. It predetermined deviations of the cost of the basket of foreign currencies and monetary and credit indicators from forecasts for the year 2011.

    To reduce inflation pressure and stabilize the currency market, the National Bank tightened the interest rate policy and the emission policy by raising the refinancing rate and interest rates for liquidity instruments. As a result, commercial banks raised interest rates for loans and new ruble deposits.

    Monetary indicators (the ruble money supply, the money supply, and bank loans) were raised above the forecasts, too. Bank assets and the regulatory capital grew much faster than planned.

    Measures taken by the National Bank and the government to stabilize the economy allowed correcting foreign trade disproportions, raising gold and foreign exchange reserves, restoring stable operation of the currency market and the deposit market.

    The financial record reflects operations performed by the National Bank in 2011. It includes the annual balance sheet, reports about profits and losses, capital changes, formation and use of funds, management of shares in authorized funds of other organizations, money spent on running the National Bank, reports on executing capital investments, reports about profit and its distribution.

    The reliability of the annual balance sheet of the National Bank, the report on profits and losses in 2011, and the abovementioned reports has been confirmed by the international auditing company Ernst & Young.