BAKU, Azerbaijan, December 14. Analysts of the Dutch ING forecast that the Central Bank of Azerbaijan (CBA) will remain the policy rates unchanged until the end of 2022, Trend reports citing the company.
The current interest rate is likely to be kept at the same level - 8 percent. However, as the company predicts, in 2023 it is expected that the rate will slightly decrease by 0.5 percent to 7.5 percent.
According to ING analysts, the Central Bank will reduce its policy rate in 2024 by 0.75 percent points to 6.75 percent, and in 2025 to 6 percent.
Previously, CBA adopted the decision to raise the discount rate by 0.25 percent, up to eight percent. The upper limit of the interest corridor remained at the level of 9.25 percent, while the lower limit was raised by one percent up to five percent.
Commenting on the decision, CBA chairman of board Taleh Kazimov said that it was made in accordance with plans to improve the operational structure of monetary policy and taking into account the actual and projected inflation, the processes taking place in the global and domestic economic environment, as well as expectations. Inflationary pressure remains in Azerbaijan, as well as in the majority of countries.
According to the CBA's analysis, the actual inflation is influenced by inflationary processes of the main trade partners. Under growing inflationary pressure in recent months it was decided to tighten monetary policy in support of savings in the national currency. In order to further strengthen the possibilities of liquidity management in the banking sector and to regulate credit activity by means of interest rates in the short-term money market, it was considered reasonable to narrow the interest rate corridor. Due to global developments, the CBA is forced to conduct tight monetary policy.