BAKU, Azerbaijan, Dec. 20
By Zeyni Jafarov - Trend:
The Board of the Central Bank of Azerbaijan (CBA) made a decision to reduce the interest rate from 6.5 percent to 6.25 percent this week, Trend reports referring to the CBA.
The lower limit of the interest rate band was set at 5.75 percent while the upper limit of the interest rate band - at 6.75 percent.
Besides, the CBA forecasted that inflation in Azerbaijan will make up nearly 3 percent by the end of 2020 and will vary in the range of 3.5-4 percent by 2021. Amid low aggregate demand due to the pandemic and a deficit in aggregate output, the annual inflation rate in November was 2.4 percent, which is below the center of the target range.
The Azerbaijani monetary base has grown by 3.3 percent since early 2020, which is rather less than it was expected,
Another event of this week was signing of a memorandum of understanding and cooperation between the Central Bank of Azerbaijan and the Central Bank of Turkey. According to the memorandum, it’s planned to exchange experience in various areas of banking, carry out joint research work, conduct training programs and provide consulting services. At the same time, within the framework of the memorandum, the parties will exchange information and opinions on economic and financial processes taking place in the two countries.
Furthermore, Azerbaijani State Statistical Committee published 11M2020 data for the country’s state budget. According to the data, a surplus of 78.4 million manat ($46.1 million) was formed in the budget from January through November 2020. The nominal volume of the gross domestic product (GDP) of Azerbaijan from January through November 2020 amounted to 64.7 billion manat ($38.05 billion).
In accordance with the data, the state budget revenues amounted to more than 22.2 billion manat ($13.05 billion) from January through November 2020, which is by 5.2 percent more than in the same period of 2019.
In accordance with the report, the state budget expenditure amounted to more than 22.2 billion manat ($13.05 billion), which is by 9.85 percent more compared to the same period of last year.
This week, the European Bank for Reconstruction and Development (EBRD) and the EU expanded support for small and medium-sized enterprises (SMEs) in Azerbaijan, amid the crisis due to the COVID-19 pandemic. So, with the support of EU grant financing in the amount of 5 million euro, the EBRD's advisory services are aimed at meeting the needs of SMEs in the Eastern Partnership member countries, as well as supporting their growth by contacting local and international consultants,
Meanwhile, the Moody's international rating agency recorded economic stability in Azerbaijan. According to the agency, the country's financial stability rating at ‘A2’ is supported by the strong position of the country's government, which means that, despite the debt in foreign currency, the volume of sovereign funds meets all direct government debts and guarantees.
The outgoing week was also remembered by the rise in prices for Azerbaijani oil and the increase in prices for precious metals.