Azerbaijan, Baku, May 21 / Trend , I.Khalilova/
Rates have been reduced under the decision of the Central Bank of Azerbaijan (CBA) by one percent to two percent since May 25, CBA press service said. The up limit of the percentage corridor was reduced from 8 to 7 percent.
"CBA continues softening money policy in favor of the macroeconomic balance, financial stability and preserving economical activity in the country given deflation processes," CBA said.
Analogue arrangements of early 2009 allowed to less inflation and neutralize the influence of global financial crisis on the banking sector.
Last year, CBA rates were reduced through three stages from 15 to 8 percent and from 8 to 3 percent through two stages this year.
Central banks are synchronously reducing rates, as economy needs cheap money.
"Financial institutions also need cheap resources both to stabilize the situation and economy," CBA General Khagani Abdullayev said.
The monetary policy in Azerbaijan is faithful to resist the global financial crisis and to support the banking system, head of the IMF, deputy director of IMF Department for the Middle East and Central Asia Valeriy Fiker said.
"CBA's current policy is right and it has helped solve problems with liquidity, banks with access to additional resources, while the world markets feel a shortage of liquidity," said head of the mission during the visit to Baku in December.
CBA reduced demands to compulsory reserves and rates after arising of financial crisis and that was a right step. Otherwise, Azerbaijan's economy would have damaged of psychological affection.
Despite other countries in the region, Azerbaijan managed to avoid a huge flow-out of capital from the banking sector The Central Bank should continue to monitor the situation to provide additional liquidity of the banking system.
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