Weekly economic review (Aug.8-12)
Azerbaijan’s Central Bank to increase interest rate
The Central Bank of Azerbaijan (CBA) has increased the interest rate this week from 7 to 9.5 percent.
The decision was made with the aim at formation of real interest rates at a level that will stimulate the attraction of deposits in national currency, and thus, increase its credibility.
Interest rate cap and floor remained unchanged – 15 and 4 percent, respectively.
This measure will also allow increasing attractiveness of sterilization operations held by the Central Bank.
Last time, the interest rate was changed in March 2016, when the CBA increased it from 5 to 7 percent. The interest rate has almost never exceeded 5 percent since 2009.
Azerbaijan ready to encourage non-cash payments through tax decrease
It is planned to decrease tax rates in order to encourage non-cash payments in Azerbaijan, the country’s Deputy Taxes Minister Ilkin Valiyev said at a press conference dedicated to execution of the Azerbaijani president’s order, dated Aug. 4, 2016, “On improvement of tax administration and approval of directions of reforms in taxation in 2016.”
“Encouraging non-cash payments and limiting cash payments will lead to a rise in the number of POS-terminals and to the transparency in the payment of taxes,” said Valiyev. “We have already had a few suggestions in connection with the expansion of non-cash payments.”
“One of these offers envisages that any payment that exceeds 1,000 manats a day must be carried out in non-cash method,” he noted. “Moreover, we have offered to reduce the rate of VAT or any other tax in order to encourage non-cash payments.”
The deputy minister added that these offers are at the stage of discussion.