Chairman of the National Bank of Belarus Raman Halouchanka has noted a cooling in demand for loans in the country. He used this to explain the reduction in standard risk calculation values for March. According to him, the regulator is thus sending a signal to banks that they are moving in the right direction.
“Put simply, there is enough money. We see a slight cooling in demand for credit products. Accordingly, interest rates have edged down a bit, and we see adequate behaviour by banks on the market — they are responding correctly to the current economic situation. And through the standard risk calculation values we make it clear to them that they are moving in the right direction, and the National Bank supports this dynamic on the credit and deposit market. This is a kind of hint to the banking system that you are heading in the right direction, but we are closely monitoring what is happening. At the same time, we are giving an additional signal that investment financing needs to be increased, by setting preferential standard risk calculation values for loans directed towards investment purposes,” he said.
Halouchanka described standard risk calculation values as a tool for “fine-tuning the banking system”. According to him, they serve as a target benchmark for the market. At the same time, banks retain the right to set interest rates above the communicated standard risk calculation values.
“They can do this, but in such cases the requirements for their reserves increase, and these loans become less profitable for banks. Nevertheless, under certain circumstances they can still issue them at rates above the standard risk calculation values,” he said.
It should be noted that Raman Halouchanka has set the banking system a target to increase investment lending this year by at least 13%.