Details added (first version published at 10:47)
Baku, Azerbaijan, June 14
By Anvar Mammadov - Trend:
The Central Bank of Azerbaijan (CBA) has reduced the interest rate from 11 to 10 percent, CBA Chairman Elman Rustamov said at a press conference on June 14.
The CBA also decided to reduce the cap of the interest rate collar from 14 to 12 percent. The floor of the interest rate collar was maintained at 8 percent.
Rustamov noted that, the decision to reduce the interest rate collar was made taking into account the entry of average annual inflation into a single-digit trajectory, and the forecasts of further decline in inflation and improvement of the external balance.
"In the past months, inflation was below the projected level, and the surplus remains in the balance of payments of the country against the background of favorable energy prices. The balance of payments also continues to improve. At the end of the first quarter, a surplus of 15.4 percent of GDP was generated in the account of current transactions. Positive trends continue in the second quarter. According to the results of the first five months of 2018, the positive trade balance increased by 2.1 times compared to the same period last year, exports - by 65.8 percent, and non-oil exports - by 14.2 percent," Rustamov said.
He noted that, along with the trade balance, improvements in the balance of services also continue.
"In 1Q2018, the deficit of the balance of services decreased by more than half compared to the same period last year, and the cash surplus was kept on the balance of tourism services," the head of the CBA said, adding that against the background of improving external indicators, there is an increase in strategic foreign exchange reserves.
This is the third decrease in the discount rate since the beginning of the year. In February, the CBA reduced the discount rate from 15 to 13 percent, and in April - from 13 to 11 percent.
Next time, the parameters of the interest rate collar will be discussed in August 2018.