Baku, Azerbaijan, Aug. 1
Trend:
The Central Bank of Azerbaijan (CBA) kept the discount rate at 15 percent.
The lower limit of the interest rate corridor was kept at 10 percent and the upper one at 18 percent.
This decision was made during the meeting of the CBA board on Aug. 1.
The CBA explains this decision by improving the foreign trade balance, which makes it possible to ensure the balance of the currency market and keep the manat exchange rate at a stable level.
“Exports increased by 36.5 percent, non-oil exports - by 27.9 percent, while imports decreased by 15.7 percent in January-June 2017 compared to January-June 2016. Surplus of foreign trade balance amounted to $1.9 billion in January-June 2017,” said in the CBA report.
According to the CBA, the stability of manat creates a de-dollarization tendency.
Azerbaijan’s non-oil GDP continued to grow by 1.7 percent in January-June 2017 compared to January-June 2016.
The growth rate in the trade sector was 3.7 percent, in the non-oil industry – 5.4 percent and in the agricultural sector – 2.2 percent.
“As for the inflation, despite the seasonal decline, short and medium-term risks have not been fully neutralized yet,” the CBA said.
"There is an expectance of a reduction in the core inflation rate this year,” the CBA said. “The core inflation level will depend on the exchange rate of manat, aggregate internal demand, changes in commodity and services prices regulated by the government and so on.”
According to the CBA, the issue of changing the discount rate will be further discussed on September 18, 2017.