BAKU, Azerbaijan, November 1. Excess liquidity in the banking system of Azerbaijan has been reduced to a minimum, Trend reports via the Central Bank of Azerbaijan (CBA).
"The CBA maintains an anti-inflationary monetary policy and steps to strengthen its ability to influence inflation. Monetary policy instruments are used while keeping the financial system's liquidity and risk balance in mind. Since August, the preservation of mandatory reserves in compliance with the new rules, the elimination of the daily limit applied to the instrument of a permanent credit line, and the holding of regular auctions with varied term bills have allowed the banking sector to reduce surplus liquidity," the CBA said.
Excess liquidity in the banking system has been minimized by reducing the quantity of available cash (liquidity) in the banking system in order to limit the excess of monetary resources that banks may employ for lending and other operations. Excess liquidity should be kept to a minimum in order to manage inflation, improve the efficiency of the banking system, and support bank financial stability.
In general, liquidity management in the banking system is an important aspect of macroeconomic policy, which aims to ensure the country's financial system's stability and sustainability.
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