Growth in oil prices maintains balance in Azerbaijan's foreign exchange market - CBA
BAKU, Azerbaijan, Mar.19
By Zeyni Jafarov - Trend:
External conditions affect the national economy and inflationary processes in Azerbaijan in different ways, Trend reports on Mar.19 referring to the country’s Central Bank (CBA).
According to the CBA, the continued trend of rising oil prices in the world market has a positive effect on the balance of payments and maintains the balance in the foreign exchange market. Influenced by expectations such as the OPEC + agreement and the global economic recovery, the average oil price has surpassed $60 a barrel since early 2021 and $67 a barrel only from early March.
The continuing rise in world food prices has a restraining effect on domestic inflation. World food prices rose 6.9 percent in 2M2021 and 16.7 percent over the past 12 months. The highest annual growth was recorded in the cost of butter (51 percent) and flour products (26.5 percent).
It’s also expected that the recovery of economic growth in the world economy, including in partner countries, through non-oil exports and investment flows will have an intensifying effect on the dynamics of demand in Azerbaijan. Meanwhile, it’s predicted that more active use of the created international transport infrastructure and the entry of the Preferential Trade Agreement with Turkey into force since March 1, 2021, will have a positive impact on the expansion of Azerbaijan's non-oil exports.
The Central Bank noted that the situation in the financial markets of Azerbaijan's trading partners is stable. In many of these states, monetary policy easing has already been put on hold.
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