Russian Gazprombank expects increase in interest rate in Azerbaijan

Economy 24 January 2022 12:22 (UTC +04:00)
Russian Gazprombank expects increase in interest rate in Azerbaijan

BAKU, Azerbaijan, Jan. 24

By Sadraddin Aghjayev - Trend:

Russia’s Gazprombank predicts an increase in the interest rate by the Central Bank of Azerbaijan (CBA) by 50-100 basis points, Deputy Head of the Market Research Department at Gazprombank Gulnara Khaidarshina told Trend on Jan. 24.

Khaidarshina added that the CBA raised the interest rate by 25 basis points - up to 7.25 percent at the previous meeting in December 2021.

“Taking into account that the inflation rate in December 2021 reached 12 percent on an annualized basis and remained beyond the upper limit of the target corridor, the CBA may need a bigger increase in the rate at the meeting on January 28, for example, by 50-100 basis points,” deputy head of the department said.

Khaidarshina stressed that taking into account that the Azerbaijani economy is recovering faster than expected and growth reached 5.6 percent in 2021 compared to the expected 5.1 percent, the rate increase will not affect the economic recovery, but will help maintain the attractiveness of deposits in Azerbaijani manat and lower inflationary expectations.

The deputy head of the department reminded that the statement was made at the CBA meeting in December 2021 that inflation expectations are still elevated.

“According to the CBA, 29 percent of households expect the inflation rate to accelerate,” Khaidarshina added.


Follow the author on Twitter: agdzhaev