Azernews.Az

By Sara Israfilbayova

The Central Bank of Azerbaijan (CBA) expects to achieve inflation close to single-digit level by late 2017, CBA Chairman Elman Rustamov told reporters in Baku.

“Now, the process of adaptation of the price level [in consumer markets] is going very slowly. This is due to various factors, mainly non-monetary ones. I would say that this is due to external factors – imports and rising prices in the world food market. After a certain transformation [in the economy] that occurred in Azerbaijan, expectations do not subside immediately,” he said.

Rustamov further noted that the Central Bank hopes for no surge in prices in the near future.

“If this does not happen, we hope that inflation will be close to a single-digit figure. A surge in inflation was observed in the beginning of the year, which affects the average annual inflation. You remember what expectations there were due to the transition to a floating exchange rate of manat,” he said.

Rustamov added that the Central Bank sees no fundamental internal factors for growth of inflation.

Prices for consumer goods and tariffs for services in Azerbaijan increased by 14 percent in January-August 2017 compared to the same period in 2016, according to the State Statistics Committee.

During the reporting period, prices for food products rose by 18.2 percent, non-food products – by 12.6 percent and the cost of paid services rendered to the population increased by 9.6 percent.

Rustamov further said that the Azerbaijani government does not see any risks for the manat rate.

"Today, Azerbaijan has a floating exchange rate of manat,” he said. “The positive trend is usually formed due to the surplus of the current account of the balance of payments. Today we expect that the current account surplus will amount to about $1.5-2 billion.”

“An important question is that how much would the strengthening of manat would be in line with the economic strategy, in particular, export diversification, but so far we do not see such risks," Rustamov said.

Rustamov stressed that so far, the Azerbaijani government has been satisfied with the current trends in the country’s economy.

"Today I have been asked about a possible devaluation,” he said. “The question has surprised me greatly because I am shocked that there is still such an opinion that devaluation is possible."

After the sharp decline of oil prices in the world market, Azerbaijani manat twice suffered devaluation. The first devaluation happened on February 21, 2015, the second on December 21, 2015.

At last sharp devaluation manat depreciated by 47 percent against US-dollar. Thus exchange rate rose from 1.05 AZN/USD to 1.55 AZN/USD.

The national currency lost its value by 124% or 2.24 times.

---

Follow us on Twitter @AzerNewsAz