BAKU, Azerbaijan, March 19
By Eldar Janashvili – Trend:
The Board of the Central Bank of Azerbaijan (CBA) has decided to leave the interest rate unchanged at 7.25 percent, Trend reports on March 19 referring to the CBA.
At the same time, the upper limit of the interest rate corridor is maintained at 9 percent and the lower limit was increased up to 6.75 percent.
This decision was made amid significant changes in the global environment and uncertainty that has arisen under its influence since the recent meeting of the Monetary Policy Council.
In connection with the adverse impact of coronavirus on the world economy, as well as breaking of the OPEC + agreement among the main oil exporters since the beginning of March led to lower oil prices up to a level of more than two years ago.
As a result of the coordinated activity of the Azerbaijani government and CBA in conditions of external shocks, equilibrium is ensured in the foreign exchange market.
Since the beginning of the year, no significant changes have occurred. The annual inflation has remained below 2.9 percent. The monetary base since the beginning of the year decreased by 11 percent, which testifies to the fact that monetary conditions are tightened.
The Central Bank of Azerbaijan holds a balanced position between price, financial stability and support for economic activity and employment.
The economic and financial potential created recently in the country is high enough to optimize the goals. CBA will expand its portfolio to sterilize excess money supply and, if necessary, will fully cover the need for liquidity of the banking system using the available tools.
In this situation, the CBA on a daily basis monitors the processes occurring in the global environment and in the country's economy, conducts continuous analysis to assess the extent of the impact of external shock on the country's economy.
The abovementioned decision has entered into force on March 19, 2020. The CBA Board’s further decision on the parameters of the interest rate corridor will be disclosed on May 1, 2020, and a corresponding press-conference will be held.
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