Monetary Environment Review. Q4-2024

Monetary conditions were neutral in Q4-2024, insufficient to cool overheated demand.
Interest rates on loans and deposits exceeded neutral levels in Q4-2024, driven by rising interest rates in Russia. This factor, independent of the National Bank's monetary policy, will continue to exert influence in 2025, leading to a moderate increase in loan and deposit rates, keeping them slightly above equilibrium levels. At the same time, the National Bank's actions in monetary policy will continue to lag in responding to inflationary risks due to its lack of independence. The Belarusian ruble remained near the equilibrium level of the real effective exchange rate in Q4-2024, with a slight undervaluation. Given the trade deficit in goods and services, this slight undervaluation will persist in 2025, with the ruble depreciating by 4–6% against the currency basket over the year.