Pasha Bank: Azerbaijani Central Bank’s discount rate must be up to 18% (UPDATE)
Headline changed, details added (first version posted at 11:31)
Baku, Azerbaijan, March 11
The discount rate set by the Central Bank of Azerbaijan (CBA) must be around 16 to 18 percent, said Taleh Kazimov, head of the Pasha Bank's board, March 11.
He made the remarks during a roundtable meeting on the AmCham support to economic reforms in Azerbaijan.
The CBA set the discount rate at 7 percent on March 4, 2016 as compared to 5 percent that has been effective since Feb. 15, 2016.
"I think the most important thing is to show the real value of the [Azerbaijani currency] manat," he said. "It is necessary to increase the CBA's rate. At present, the rate is seven percent. I think the rate does not reflect the market's need in manats."
He added that the liquidity of the manat is the most discussed topic in the market, adding that its growth causes concern, as it may result in speculations in the market.
He further stressed the need for a targeted lending.
Kazimov said that the upper limit on the insured deposits must be at least 16 percent, given that the average yield on the bonds of the finance ministry is around 16 percent.
Currently, the highest rate on the insured manat deposits is 12 percent and 3 percent for the insured dollar deposits.