Azerbaijan, Baku, 1 December / Trend , corr. I.Khalilova / In accordance with a decision of the Board of the National Bank of Azerbaijan (NBA), interest rate was cut by 2% to 8% on 1 December, the NBA said on 1 December. Upper limit of interest rate has been reduced from 15% to 13% and obligatory norms of reservation in foreign currency - from 9% to 6%.
"Dynamic development of the Azerbaijani economy lasted and rates of the economic growth were maintained at two-figure level under conditions of the intensified global economic crisis within 2008, the NBA said. Currency position of the country has been more improved and surplus of currency balance has reached $15bln. Inflation ratio level has dropped in the economy."
The NBA continues measures to hold preventive monetary policy under these conditions to neutralize risk factor in an advance regime. The taken measures creates conditions to maintain high liquidity in banking system and quality of banking assets, as well as deepening of financial stability on this base, experts of the NBA said.
Maintenance of liquidity in banking system at a satisfactory level will provide banks to continue loan activity. This will enable to maintain dynamics of economic growth in non-oil sector of the country.
NBA will continue to soften the money policy in 2009, Elman Rustamov, the chairman of the Board of NBA, said.
"The rate of NBA was cut through two stages from 15 to 10 percent. In 2009, bank will continue the same policy and the rate of refinancing will be reduced through several stages again," Rustamov said.
Now, all Central banks conduct the policy to reduce the rate due to the economy needs in cheap money. "Financial institutes feel a need in cheap money resources to stabilize its state and in the future," Rustamov added.
Today Azerbaijan's primary task under conditions of defilation and reduction of demand is to prevent recession in the non-oil sector. For this purpose a financial 'injection' is required.
"The Azerbaijani Government possesses enough off-budget funds to provide certain liquidity to country's economy," Rustamov said.
The correspondent can be contacted at: [email protected]