Azerbaijan, Baku, Dec. 27 / Trend I.Khalilova /
As mentioned in the statement of the Central Bank of Azerbaijan (CBA) on the main directions of monetary and financial stability for 2013 published on Thursday, maintaining the inflation rate at five to six per cent is the main objective of monetary policy in Azerbaijan in 2013.
'The Central Bank will try to influence the rate of monetary growth through classic regulatory tools. Alongside, provision of the necessary macroeconomic, institutional and structural conditions for the introduction of new and more effective in terms of influence on inflation and business cycle and monetary policy regime will be our focus', the statement says.
Introduction of a flexible exchange rate regime providing a more effective monetary control over money supply and interest rates will be particularly important among these conditions.
According to the statement, transforming economic and export diversification, strengthening of fiscal sustainability and development of financial markets and interest rates into the main tool of influence over inflation is important for transition into this system.
A decline in the growth of consumer prices that started in the second half of 2011, also continued into 2012. Between January-November the average annual inflation rate was 1.2 per cent, which is eight per cent lower than last year.
'The pace of wage growth in the country exceeds the inflation rate by 7.3 per cent. The inflation growth rate in trading partner states exceeded the increase in consumer prices in Azerbaijan by five per cent. For comparison, in 2012 the IMF inflation forecast for developing countries was 6.1 per cent', the statement says.
Within 11 months the agricultural products producers' price index dropped by 0.3 per cent. Cheapening of prices was observed particularly in crop production. Reduction of prices was also observed in most areas of the non-oil industry (food, metals, chemicals and wood). According to the Central Bank, along with consumer market, prices have remained stable in the real estate market as well.