Baku, Azerbaijan, June 14
By Anvar Mammadov - Trend:
The increase in the interest rate of the Federal Reserve System (FED) of the US will not have any direct impact on the Azerbaijani manat, said the Chairman of the Central Bank of Azerbaijan Elman Rustamov at a press conference on June 14.
"The FED's rate hike is not directly related to us, but it is a very important indicator for the global economy. The FED's rate hikes lead to the funds injected in emerging economies with low rates, gradually return to developed economies, like that of the US. The financial market of Azerbaijan is not yet so much integrated into the world market, so the FED's decisions can only cause a psychological impact," Rustamov said.
The US Federal Reserve following the meeting on June 12-13 increased the base interest rate by 0.25 percentage points to 1.75-2 percent from 1.5-1.75 percent per annum.
In 2018, the rate was already raised in March by 0.25 percentage points. In 2017, the regulator raised the rate three times: in December-to 1.25-1.5 percent, in June-to 1-1,25 percent, and in March-to 0.75-1 percent per annum.
Prior to that, the rate of increase was slower — once in 2016 and 2015. In 2007-2008, the regulator gradually lowered the rate until it reached the minimum level of 0-0.25 percent in December 2008.
The FED expects that further gradual rate increases will be consistent with a steady increase in economic activity in the United States, favorable conditions in the labor market and stabilization of inflation near the target level of two percent in the medium term.