Azerbaijan, Baku, Nov 20 /Trend A.Akhundov/
The Central Bank of Azerbaijan (CBA) should tighten its monetary policy in the event of demand pressures due to increasing government spending and accelerating credit growth, IMF mission to Azerbaijan official Raja Al Marzugi said at a press conference today.
The mission began its work on November 8.
"Tools for pursuing the policy are limited, so strengthening the transmission mechanism will help to control the volatility of inflation in the long run," Al Marzugi said.
He underscored that the IMF and the Central Bank have agreed on the importance of the transition to a flexible exchange rate, but not in the short term.
"It is the medium-and long-term plans. The Central bank has already received technical assistance in this area. The final report of the mission, which dealt with the technical assistance, will soon be ready and handed over to the authorities," Al Marzugi said.
He underscored that these issues will also be discussed during the next mission for consultations under Article IV in the agreement On creation of the IMF, tentatively scheduled for late February 2013.