BAKU, Azerbaijan, February 5. The Central Bank of Azerbaijan (CBA) will be able to return to reducing the interest rate no earlier than the first quarter of 2024, Gulnara Khaidarshina, Deputy Head of Research at Russian Gazprombank, told Trend.
A steady slowdown in annual inflation may enable CBA to reduce the interest rate.
"At the first meeting of directors in 2023, the Central Bank of Azerbaijan again raised the refinancing rate by 25 basis points to 8.5 percent. The decision to continue the cycle of normalizing monetary conditions meets our expectations. The increase in the key rate is justified by the continued uncertainty about the further trajectory of inflation and increased inflation expectations, as well as high economic activity, and expanded money supply amid stimulating fiscal policy," she said.
On Feb. 1, the CBA raised the interest rate by 0.25 percentage points to 8.5 percent. The interest rate corridor's upper limit has been raised to 9.5 percent, while the lower limit has been raised to 6.75 percent.