BAKU, Azerbaijan, July 29
By Zeyni Jafarov - Trend:
The balance of risks in the Azerbaijani economy has not greatly changed since June and still accelerates inflation rate, so the Central Bank of Azerbaijan (CBA) is expected to again maintain the interest rate at 6.25 percent, Gulnara Khaidarshina, deputy head of the research department of Russian Gazprombank, told Trend on July 29.
“This decision will be facilitated by monetary conditions, which continue to soften due to fiscal stimulus; inflation, which has accelerated since the beginning of the year, but remained within the target corridor of the CBA; the increased risks of inflationary pressure by the countries - key trade partners of Azerbaijan and strengthening of the recovery trend in the economy,” Khaidarshina added.
“The monetary base increased by 15.6 percent while lending to the economy - by 4.9 percent in the first half of the year,” deputy head of the research department said. “The Azerbaijani budget was executed with a surplus of 0.4 percent of GDP.”
“An increase in consumer prices in Azerbaijan accelerated in June up to 4.7 percent and overcame the middle of the target corridor of the Central Bank, remaining, nevertheless, within it,” Khaidarshina said. “The stable exchange rate of the Azerbaijani manat, as well as still weak domestic demand, contributed to keeping inflation within the target corridor.”
"Taking into account the indicated factors, the refinancing rate is likely to be kept at 6.25 percent,” deputy head of the research department said. “As the balance of risks has not undergone big changes since June, a signal about a pause in reducing the rate at least until the end of the year is expected to be made again."