Azerbaijan’s Central Bank reduces refinancing rate
The Central Bank of Azerbaijan (CBA) has reduced the refinancing rate from 15 to 13 percent, Elman Rustamov, chairman of the CBA, said at a press conference in Baku on Feb. 12.
The CBA board also decided to down the lower limit of the interest rate corridor from 10 to 8 percent, and the upper limit - from 18 to 16 percent, he noted.
Average annual one-digit inflation, forecasts on further decrease of the inflation rate and improvement of the balance of payments conditioned reduction of the interest rate parameters, he added.
Depending on the continuation of these positive trends, the CBA considers it possible to further decrease the refinancing rate, he noted.
He said that lowering the refinancing rate means easing monetary policy.
"I would like to note that if no external shocks and risks emerge during the year, the inflation rate will be even lower than the forecast figure of 6-8 percent," he noted.
Rustamov stressed that when making a decision to down the parameters of the interest rate corridor, the CBA board took into account a number of external and internal processes.
"The CBA will continue to monitor the processes taking place in the economy and financial markets, and will try to ensure stability of prices by using available tools," Rustamov said.
He added that the parameters of the interest rate corridor will be discussed next time in April.
Azerbaijan expects balance of payments surplus for 2017
The Central Bank of Azerbaijan (CBA) expects a current account surplus of the country's balance of payments for 2017 at five percent of GDP, Elman Rustamov, chairman of the CBA, said at a press conference in Baku on Feb. 12.
He said that such positive trend will continue in 2018. The head of the CBA noted that the macroeconomic reforms held since late 2014 aimed at diversifying the economy, as well as increase in oil prices, have ensured improvement of Azerbaijan's balance of payments.
"Last year, surplus of the foreign trade balance amounted to $5 billion, which is 10 times more than in 2016," said Rustamov. "Exports grew 52 percent and non-oil exports grew 23 percent. Improvement is also observed in the balances of primary and secondary revenues, as well as in the balance of services. The deficit of the balance of services has significantly decreased, and the surplus has been achieved regarding tourism services."
He also added that as a result of improving Azerbaijan's balance of payments, strategic foreign exchange reserves grew 11 percent in 2017.
Azerbaijan to keep implementing reforms for stronger economy
Azerbaijan will continue implementing reforms to create very strong economy based on knowledge, technologies, good governance and human capital, President Ilham Aliyev said Feb. 13 at a meeting with a delegation led by Wolfgang Buchele, chairman of Germany's Committee on Eastern European Economic Relations.
The head of state underlined deep commitment to the implementation of these reforms.
President Aliyev noted that the reforms carried out in the economic sphere, in particular in the institutional, structural, fiscal and other spheres, have already yielded successful results and these reforms will be continued.
The main task is to ensure sustainable development based on the non-oil sector, the Azerbaijani president said, adding that from this point of view, Azerbaijan intends to ensure observance of the transparency and accountability principles.
Great attention is paid to the investment environment in Azerbaijan, he noted. Over the past 15 years, investments worth more than $230 billion have been attracted, he added.
Despite that these investments were mainly directed to the oil sector, attraction of big investments to the non-oil sector at the same time made it possible to ensure diversification of economy and regional development, Ilham Aliyev said.
He noted that the energy projects will bring additional income for a long period and added that the macroeconomic situation in Azerbaijan is very positive, the volume of international foreign exchange reserves is equal to GDP, and the country's external debt is at a very low level - about 20 percent (of GDP).
In the first month of this year inflation was 5.5 percent, Ilham Aliyev said, adding that the population's income grew by more than 11 percent.
All this creates fundamental basis for development, the Azerbaijani president said. Investments in infrastructure and agriculture are yielding results, he added.
President Ilham Aliyev noted that the oil and gas sector will simply make it possible to increase the reserves and incomes of the State Oil Fund.
Economy minister talks on Chinese investments in Azerbaijan's economy
To date, China has invested over $770 million in the Azerbaijani economy, Economy Minister Shahin Mustafayev said at a press conference on the Azerbaijani-Chinese economic relations on Feb.13.
The minister noted that bulk of this investment was made in the oil industry.
"We expect to increase investments in the non-oil sector, and we are working in this direction. It is worth noting the cooperation of the parties on the SOCAR GPC project, a relevant memorandum has been signed. Azerbaijan attaches great importance to this project and is interested in the participation of Chinese companies. Furthermore, a memorandum was signed between AS Group and China CAMC Engineering Co, which will attract additional investment," Mustafayev said.
The minister added that China is also interested in attracting Azerbaijani investments.
New expert group established at Azerbaijan Banking Association
A new expert group on treasury and fund management has been established at the Azerbaijan Banking Association (ABA), ABA said in a message on Feb.13.
First Deputy Chairman of the Board of AFB Bank Aydin Huseynov will head the expert group.
The expert group will deal with the issues of asset and liability management, currency transactions, management of securities, funds, currency and interest rate risks and other issues.
To date, nine expert groups have been operating at ABA. They deal with issues of marketing and PR, IT security, credit risks, internal audit, reporting, development of payment systems, mortgage lending, legal issues and others.