Head of NBA Says Azerbaijan Central Bank to Determine Priorities in Anti-Inflation Policy
Azerbaijan, Baku/ Trend , corr. I. Khalilova; E. Husseynli/ Elman Rustamov, the Head of the Board of the National Bank of Azerbaijan (NBA), has said today that the NBA is expected to determine the priorities of the Central Bank's anti-inflation policy.
"At present, monetary factors of forming the inflation rate are just over 10%, 5% being the growth of money supply. Therefore we shall have to determine our priorities," considers Mr. Rustamov.
According to him, the increase in budget expenditures for 2007 will have a slight effect on the inflation rate in the country, since they will be realized at the expense of the existing reserves. The efficiency of tax and customs dues will also be increased, but not at the expense of the returns the country gains from oil sale.
The average annual inflation rate of the country exceeds 16 %; however the increase in the index of consumer prices for January-April, 2007 reached 10 %.
"The Reduction of the inflation growth rate is explained by the stabilization measures taken. We are particularly controlling the money supply and doing our best to significantly reduce any effect on the rate of the National Currency of Manat, thereby, the scope of converting at a very low rate," said Mr. Rustamov.
The deflation in January-April, 2006 was 2.5 %, which will be taken into account in the forecast, as well as two very substantial factors (weather and plenty of agricultural production). One third of the inflation rate is from fruit and vegetables, and about 50% at consumer goods.
Mr. Rustamov believes that implementing economic projects in the country will reduce the threat of inflation in Azerbaijan.
According to him, to maintain the macroeconomic stability and develop the non-oil sector in the country, the inflation rate should be acceptable (at a one-digit rate). "That enables maintaining the international capability to compete at a high level, and it is important for the development of the industry in the non-oil and agricultural sectors. During the meeting of the Azerbaijani Government dedicated to the results of the first quarter of 2007, the Azerbaijani President put the achievement of macroeconomic stability as one of the key factors. Its ground lies in a low inflation rate," concluded the Head of NBA.