BAKU, Azerbaijan, October 3. The Central Bank of Azerbaijan (CBA) has reduced inflation to a certain extent by increasing the nominal effective exchange rate of the manat, the chairman of the CBA, Taleh Kazimov said, Trend reports.
"Our analysis has shown that prices in the domestic market are rising under the influence of external supply factors. It is quite obvious that the bank will be less effective in containing inflationary pressure caused by external factors with the help of monetary policy instruments,” said Kazimov.
“During this period, inflation was imported from key trading partners, some of which were significantly affected by high global food and energy prices. Our main strategy was to ensure control over demand factors by increasing the discount rate. In addition, we have maintained the stability of the national currency during periods of oversupply of foreign currency," Kazimov said.
According to him, oil revenues do not have a direct impact on inflation through the channel of aggregate demand.
"According to the institutional structure, the State Oil Fund of Azerbaijan (SOFAZ) receives all revenues from the sale of oil and gas and transfers a predetermined amount of these revenues to the state budget in accordance with the fiscal rule," Kazimov said.