Central Bank of Azerbaijan considers it appropriate to continue current policy of maintaining stable exchange rate
Azerbaijan, Baku, Aug. 16 / Trend N.Ismayilova /
In the first half of 2010, the Central Bank of Azerbaijan (CBA) implemented its policy in terms of a slow recovery of global economic growth, uneven running in the world, increasing the instability in international financial and currency markets, maintaining favorable conjuncture for oil market and stabile growth dynamics of the economy, the CBA statement on the results of the Central Bank Board's meeting on the outcome of the first half of 2010 says.
In terms of sharp volatility of the world's leading currencies, rate of manat has changed at 0.04 percent against the U.S. dollar, and in general remained at a stable level. Fundamental macroeconomic factor of the stability of rate of the manat against the U.S. dollar was a significant balance of payments surplus. Stable exchange rate of manat, as before, in the first half of this year allowed to prevent the growth of inflation, external debt obligations of economic entities, dollarization, and, in general, to maintain the real incomes of the population.
The CBA retained parameters of the percentage corridor, the mandatory reserve ratio, the sources of monetary growth on the backdrop of current trends of the economic cycle to maintain the working activity and economic growth.
The policy of encouraging lower interest rates on deposits continued in the first half. During the report period, extended broad money grew by 7.5 percent, which created conditions for lower interest rates. Inflation amounted to 4.9 percent compared to the same period of 2010.
During the report period, the CBA further improved supervisory and regulatory framework to strengthen the financial stability. As a result, financial stability of the banking system was preserved and developed. In the first half, the assets of the banking system increased by 4.4 percent, the credit portfolio - by 5.2 percent and population's deposits - by 9.8 percent.
Taking into account the macroeconomic projections, the CBA Board decided to continue to keep policies aimed at maintaining a stable exchange rate of manat, the discount rate, the norms of compulsory redundancy and the parameters of interest corridor unchanged.
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