The National Bank of Azerbaijan (NBA) publicized the main lines of the monetary policy for 2006. They are based on the governments budget policy for 2006, the economic growth forecasts, guiding lines for preserving the macro-economic stability (one-digit inflation) and priorities for the non-oil sector development, Trend reports citing the NBA statement.
According to the forecasts, spasmodic dynamics of the economy development will continue in the current year, the tempos of economic growth will exceed 30% and only the oil sector growth will make 55%, and its share in GDP is 43%. The budget revenues growth is envisioned till 70%. The oil revenues components will be targeted at the socio-economic development which is the basic factor for the money supply and the national currency rate impact.
60% of budget expenditures will be funded on the account of oil revenues in foreign currency. It enables to judge the entries of foreign currency volume to the currency market, at the result of which the money demand will increase, which in its turn affect the exchange rate and consumer prices.
Taking into consideration all this, NBA plans to view the re-financing rate level, as well as ensure inflation expectations decrease.