Belarus's central bank said on Tuesday it expected its rouble to weaken 3 to 7 percent in 2015 and warned it may raise a key interest rate if inflation rises due to fallout from economic turmoil in Russia. The Belarussian currency has already lost around 28 percent in value since mid-December, around the time when Western sanctions over Ukraine and a sliding oil price pushed Russia's rouble to record lows.
The extent of further domestic rouble weakness will depend on "the different dynamics of oil prices, the Russian rouble rate and economic activity in main trading partners," the central bank said. Belarussian authorities had said inflation would fall to 12 percent this year from the 16 percent level reached at end-2014, but this forecast may now have to be revised, the bank said. "In view of the sharp deterioration both in external markets and on the internal currency and deposit markets ... inflation forecasts will need to be adjusted," it said, without indicating what new level it expected.