Details added (first version posted on 09:56)
Baku, Azerbaijan, Feb. 15
The Central Bank of Azerbaijan has increased the interest rate from three to five percent since Feb. 15, 2016, the message of the bank said.
The lower limit of the interest rate corridor for liquidity operations has been set at two percent, and the upper limit - at ten percent, according to the message.
This decision was made in order to create conditions for improvement of monetary policy instruments in line with the situation on the currency market, as well as to strengthen the credibility of the Azerbaijani manat and increase the volume of deposits in manats, according to the bank.
"This decision has been also made based on the goal of achieving sustainable stability of prices in the medium term, as well as forecasts of macroeconomic indicators," said the message.
All the necessary measures are taken to apply operational frameworks corresponding to the new exchange rate policy and achieve stabilization of the situation on the currency market by this means, according to the bank's message.
"The decline in demand for foreign currency at auctions held by the Central Bank of Azerbaijan, as well as consolidation of the manat exchange rate against foreign currencies can be regarded as primary results to create a balance on the foreign exchange market," said the message. "The new exchange rate regime is accompanied by the development of monetary and foreign currency market and risk management by economic agents."
The message said that stabilization of the situation on the foreign exchange market, the banks' offering more attractive interest rates on deposits in national currency, as well as placing government bonds in manats with higher yields than those in foreign currency, has a positive impact on the wider use of the national currency as a means of accumulation.
"The Central Bank of Azerbaijan will continue to monitor macroeconomic processes and the situation on the financial market, and, if necessary, will gradually react via monetary policy instruments," the message said.