Over two years into monetary easing in Belarus, its interest rates are still Europe’s second-highest when adjusted for inflation, outmatched only by Turkey after recent efforts there to stabilise the currency.
With the world on edge over trade disputes and emerging nations beset by outflows, the Belarusian central bank doesn’t think borrowing costs could go much lower. 
“The refinancing rate is still a bit high, but we should also take into account the risks and the uncertainty in international markets,” deputy governor Sergei Kalechits said in an interview in St Petersburg.
Policy makers in the Belarusian capital, Minsk, will decide whether to extend their pause to two meetings after 13 straight rate cuts delivered 14.5 percentage points of easing since the start of 2016, taking the benchmark to 10.5%.
A precipitous decline in inflation, which topped 100% in 2012, has left Belarus with a real rate of 6.1%, compared with 8.55% in Turkey and 4.85% in Russia. Since 2015, Belarus has embarked on what Kalechits called “anti-inflationary policy,” which has brought price growth to an annual 4.4% in May.
A former part of the Soviet Union that borders Russia and three European Union countries, Belarus is the latest developing nation to turn cautious on monetary policy. 
As global tensions ratchet up and developing economies try to adjust to expectations of higher US borrowing costs, central bankers from Argentina to India have moved to raise rates. Meanwhile, easing cycles in Russia and Kazakhstan are drawing to a close, while Hungary signalled for the first time on Tuesday the eventual end of its loose stance.
In the case of Belarus, some room remains to reduce the key rate, according to Kalechits, who described its current level as “close to an equilibrium” from borrowers’ point of view. 
Demand for loans is rising, most notably from households, while the elevated cost of money allows Belarusian rouble deposits to outperform savings held in foreign currency, he said.
The country sees macroeconomic stability as the main factor that could drive foreign investment and spur the rebound in economic growth. Belarus continues to liberalise its financial market and expects to scrap the obligatory conversion of foreign-currency proceeds by companies into roubles by mid-year, Kalechits said.
The National Bank of Belarus’s focus on inflation has echoes of the approach taken across former Soviet nations such as Russia and Kazakhstan. 
For this year, Belarus wants to keep price growth at no higher than 6%, lowering the target to 5% by 2020 and then possibly to 4%, in line with Russia’s, according to Kalechits.
As its policy framework evolves, the central bank has also begun scheduling its rate decisions rather than announcing them without warning. Any cuts, however, will be made in smaller steps than previously, Kalechits said. Some officials have suggested that the benchmark could end the year at as low as 9.5%.
“There are opportunities for rate cuts, but clearly they won’t happen at the same pace as last year,” Kalechits said.