The National Bank of Azerbaijan (NBA) announced the application of a percentage corridor' with respect to adjust the monetary policy to the international standards, Trend reports.
NBA said that the application of this approach along with the new structure of operations envisages the expansion of NBA opportunities on influence on the cost of money in economy. It will enable to create necessary conditions for increase of efficiency of operative monetary management.
In accordance with the new structure of operations, NBA will carry out its operations in the monetary market in two directions вЂ" through frame tools and operations in the open market.
One-day repo (a tool for attracting funds) and reverse repo (a tool for placing funds) can act as frame tools. These operations can be carried out at any time on definite rates at the initiative of banks. Rates on frame tools will a rate corridor for other operations by NBA. Minimal amount of the corridor will restricted with the rate of attracting funds (one-day repo), while maximal limit with the placing rate (one-day reverse repo). The re-financing rate of NBA will be one of parameters of rate corridor.
Second direction of NBA operations will be issue of notes of short-term operations in the open market, which will be carried out at NBA initiative. Depending on the goals, the operations can be carried out through announcing the prices of the auction (direct) or announcing the amount (indirect).
Application of new tools of monetary policy will begin from the second quarter of 2007. The estimation of parameters of the rate corridor will be carried out once in months, beginning from the second quarter and if necessity, can be defined at the resolution by the NBA Board.