BAKU, Azerbaijan, Jan. 30
By Nazrin Israfilova - Trend:
The information has been spread this week that the Board of the Central Bank of Azerbaijan (CBA) decided to raise the interest rate by 0.25 percentage points from 7.25 percent to 7.5 percent.
Chairman of the Board of the Central Bank of Azerbaijan (CBA) Elman Rustamov said that the upper limit of the interest rate corridor increased from 8 percent to 9 percent while the lower limit was 6 percent, remaining unchanged.
This decision was made on the basis of the forecast of short-term and medium-term inflationary factors, taking into account the impact of increasing inflationary processes in the global economy, in particular, the transfer of rising prices for food and raw materials, transport and logistics costs, as well as the processes of liberalization of regulated prices and tariffs to the national economy amid the growing balanced domestic demand.
The inflation rate amounted to 6.75 percent in Azerbaijan in 2021.
Rustamov said that the export prices increased by more than 20 percent, moreover, the transportation costs of goods increased in Azerbaijan in 2021.
According to the World Bank, the export of oil and non-oil products increased in Azerbaijan in 2021.
The annual inflation in Azerbaijan is forecast above the target range of 2 to 6 percent in 2022, i.e. at around 6.6-7.5 percent. The CBA forecasts that the annual inflation will be close to target range in 2023.
A decrease in sales of foreign currency has been recorded in Azerbaijan since January 25, 2022.
This proves the stability of the Azerbaijani manat, as well as the belief of Azerbaijan’s population in the national currency stability.
“Azerbaijan’s banks also note the fall in sales of foreign currency, in particular, the US dollar,” Rustamov said.
Rustamov said that the CBA fully meets the local banks' needs at the auctions for the foreign currency sales.
The demand for foreign currency is expected in Azerbaijan in February 2022. The increase in sale of foreign currency at the CBA’s auctions was recorded in January 2021.This is connected with the increase in expenditures of state budget last year and the issuance of great volume of cash in circulation.
The CBA does not see a necessity for creating any new legislative base for regulation of activity of digital banks.
CBA executive director Rashad Orujov said that operation of digital banks such as BirBank and Leobank is regulated in accordance with the legislative base of traditional banks.
The Azerbaijani and Turkish central banks are not holding any negotiations on the currency swap deal, Chairman of the CBA Board Elman Rustamov said.
“The CBA refutes the information spread by several media outlets about alleged negotiations on this matter,” Rustamov said.
Rustamov added that the central banks of the two countries are actively cooperating in several spheres.
The overall number of payments carried out via Apple Pay in Azerbaijan amounted to 1.1 million over last two months and their value exceeded 30 million manat ($17.6 million), CBA executive director Farid Osmanov said.
CBA is interested on introducing more non-contact payment methods in the country.
It is forecast that Google Pay and Samsung Pay will also be integrated in Azerbaijan before the end of this year.
The Azerbaijani E-PUL payment system is planned to be turned into a neo-bank (a bank that exists entirely in digital form), Samir Nasibov, CEO of PAYSIS company (the system's legal owner), said.
Nasibov added that this initiative is reflected in the company's development strategy.
“Traditional banks are mainly focused on getting net income from the commission fee and are less open to the introduction of new products, and obtaining new sources of income,” Nasibov said. “The neo-banks, on the contrary, can be more flexible and creative in making partnership with other non-banking organizations, thus increasing profit and reducing dependence on traditional income sources.”