Discount rate to be reduced in August in Azerbaijan – CBA (UPDATE)
Details added (first version posted on 10:46)
Baku, Azerbaijan, June 22
By Anvar Mammadov – Trend:
The Central Bank of Azerbaijan (CBA) will view the issue of reducing the discount rate at its next meeting on August 1.
The CBA said in a message June 22 that the management, which held a meeting recently, noted the potential to reduce the discount rate from the 2H2017, depending on economic and inflation dynamics.
Currently, the CBA’s discount rate is 15 percent.
According to the message, currently, the average annual inflation in the country is 13.8 percent. Analysis shows that the inflation is caused by non-monetary factors.
CBA surveys show that despite the decline in inflation expectations against the backdrop of stabilization of the Azerbaijani manat’s rate and neutralization of money supply, they remain significant, says the message.
The CBA Board believes that under stable monetary conditions and the absence of rate volatility, inflation risks were limited and inflation expectations of the population and business should decrease in the second half of 2017, says the message.
According to the message, the planned transfer of the CBA to targeted inflation, the expected results in the direction of deepening financial stability, the approval and introduction of new fiscal rules, as well as the institutionalization of the coordination framework for macroeconomic policy in general will provide an opportunity to manage medium-term inflation risks more effectively.