BAKU, Azerbaijan, March 30. Russia’s Gazprombank expects another increase in the refinancing rate by 25 basis points to 9 percent at a meeting to be held on May 3, Gulnara Khaidarshina, Deputy Head of Research at Russian Gazprombank, told Trend.
According to Khairdarshina, the Central Bank of Azerbaijan (CBA) will continue to use all the tools at its disposal to ease inflationary pressure by curbing the excessive expansion of aggregate demand.
"With inflation slowing down in accordance with forecasts, we see the possibility of a pause in the rate increase and its follow-up reduction. The CBA may take a pause in tightening monetary conditions, but we believe that the rate cut cycle can be resumed no earlier than the first quarter of next year," she said.
Furthermore, the CBA confirmed the inflation forecast for the end of the year updated in early February, while the inflation decreasing by 8 percent year-on-year in the absence of new price shocks is still expected. The bank also noted that non-monetary measures to regulate certain prices will contribute to the easing of pro-inflationary pressure in the economy, which will have not only a direct disinflationary effect but also an indirect one through lowered expectations of inflation.
At the same time, on March 29, the CBA decided to raise the discount rate by 0.25 percentage points to 8.75 percent. The upper limit of the interest rate corridor increased from 9.5 percent to 9.75 percent, and the lower limit grew from 6.75 percent to 7 percent.