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CBA ready for deflation measures

Business Materials 11 August 2010 15:26 (UTC +04:00)

Azerbaijan, Baku, August 11 / Trend I. Khalilova /

According to the forecasts of the Central Bank of Azerbaijan (CBA), the average annual inflation is expected to be simple by late 2010, the CBA said.

"These projections are based on an analysis of the processes occurring in the first half of 2010, as well as expectations for global and domestic environment. In case of intensification of inflation, the CBA as part of its authority will take the necessary disinflation measures," the bank said.

Inflation amounted to 2.1 percent in June 2010 in relation to December 2009, about 6.1 percent - by June 2009. Seasonal deflation was observed in the last two months. The average annual inflation rate was 4.9 percent, of which 2.6 percentage points was achieved as a result of rise in price for food.

According to econometric calculations in the CBA, it was revealed that the average annual inflation in the first six months was formed by external factors at 43.3 percent, 27.4 percent - the nominal effective exchange rate, 29 percent - the money supply (M1), and 0,3 percent - due to seasonal factors.

In June, base inflation amounted to 0.8 percent by early 2010 and 3,4 percent - by the same month of the last year. Average base inflation was 2.4 percent for six months.

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