Azerbaijan, Baku, Nov. 1 / Trend N. Ismayilova /
Azerbaijan should tighten monetary policy in the short-term prospect if the increase in aggregate demand leads to the inflationary pressure, the head of IMF mission in the country, deputy director of the Middle East and Central Asia Department Nadeem Ilahi said at a press conference in Baku today.
The IMF mission is in Baku from October 20 to November 2 to conduct consultations under Article IV of the Agreement on the IMF Establishment together with the Azerbaijani government. The consultations are held on a regular basis annually.
"It would be useful for the government of the country to strengthen the instruments of monetary policy to better control inflation in the middle-term prospect," he said.
He said that Azerbaijan should strengthen banking supervision, by ensuring the use of standards and strengthening the preventive nature of macro-prudential measures.
"The issues of liquidity and capital adequacy in the banking system must be resolved quickly, while maintaining financial stability," he said.
Azerbaijan has been cooperating with the IMF since 1992. It has been cooperating with the Monetary Fund on the level of consultations under Article IV for the last six years.