Russia’s Gazprombank projects Azerbaijan’s refinancing rate level

Business Materials 28 October 2021 13:44 (UTC +04:00)
Russia’s Gazprombank projects Azerbaijan’s refinancing rate level

BAKU, Azerbaijan, Oct.28

By Sadraddin Aghjayev - Trend:

The Central Bank of Azerbaijan (CBA), following the upcoming meeting on October 29, should increase the refinancing rate by 50 basis points - up to seven percent, as we estimate, Deputy Head of the Market Analysis Department of Gazprombank Gulnara Haydarshina told Trend.

According to Haydarshina, the bank highlighted the arguments in favor of such a decision, namely, inflationary pressure in the economy is increasing, including due to the growth of inflationary risks in the countries - key exporters to Azerbaijan. Also, fiscal incentives are already creating soft monetary conditions, and the peak of budget spending has not yet arrived; economic growth is accelerating.

"We expect that the Azerbaijani Central Bank on October 29 will consider matter of a repeated rate hike in order to curb inflationary risks in the economy and support the attractiveness of deposits in the national currency," Haydarshina said.

Also, in her opinion, the recovery trend in the economy of Azerbaijan is strengthening.

“According to the results of 9M2021, the growth of the Azerbaijani economy recovered to 4.8 percent after falling by 5.7 percent in the second and fourth quarters of 2020. This was facilitated by the recovery in the non-oil sector due to the abolition of strict quarantine measures at the beginning of the year and fiscal incentives. In the first nine months of this year, the non-oil sector grew by 6.2 percent compared to last year. In addition, thanks to the relaxation of OPEC + restrictions, the oil and gas sector returned to growth, which in 9M2021 recovered to 1.4 percent compared to last year,” she said.

“We expect that the recovery trend in the oil sector and in the economy as a whole will intensify in the fourth quarter of this year following the revival of external demand and domestic economic activity in the absence of repeated quarantine," Haydarshina added.


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