Central Bank: High oil prices have a positive impact on Azerbaijan’s foreign economic position

Business Materials 4 May 2012 14:48 (UTC +04:00)

Azerbaijan, Baku, May 4 /Trend A.Akhundov/

In the first quarter of 2012, the Central Bank of Azerbaijan conducted its monetary policy during conditions of a fragile global economy, the relative improvement in solving the problem of public debt in the Eurozone and the conservation of volatility in global financial and commodity markets, the Central Bank said on Friday.

"The external economic position of the country was favourable on the background of high oil prices on world markets. Growth of strategic currency reserves of the country continued and economic sustainability enhanced even more. The economy continued its dynamic growth due to the development of the non-oil sector," the CBA said.

A policy of maintaining adequate control over the factors influencing the macroeconomic and financial stability was conducted by the CBA in the first quarter.

"The CBA has sent its activities on the implementation of such goals as keeping inflation at an optimal level, the stability of the manat and increased stability and development of banking and financial sector," the bank said.

Given the growth of world commodity prices and the expansion of domestic demand in the reporting period, the central bank conducted a monetary policy of an anti-inflationary nature.
"As a result, inflation was kept at one level and the exchange rate of the manat has remained stable which is an important factor in macro-financial stability," the bank said.

Average annual inflation was 3.1 per cent in the first quarter which speaks of a serious slowdown in the growth of the consumer price index over the same period last year (5.6 per cent). At the same time the average annual growth in food prices was 3.9 per cent compared to 13.4 per cent.

Rate of the manat against the dollar strengthened at 0.04 per cent in the first quarter.