Azernews.Az

Monday July 22 2024

CBA maintains stability amid economic developments

21 June 2024 13:18 (UTC+04:00)
CBA maintains stability amid economic developments
Ulviyya Shahin
Ulviyya Shahin
Read more

The Management Board of the Central Bank of Azerbaijan (CBA) recently affirmed its decision to uphold the discount rate at 7.25%, Azernews reports citing CBA's statement.

This decision maintains the lower limit of the interest rate corridor at 6.25% and the upper limit at 8.25%, ensuring stability in monetary policy amidst economic fluctuations.

The CBA explained that the decision was made after careful consideration of actual and projected inflation rates relative to the target range of 4±2%. Factors influencing inflation trends and risk assessments were pivotal in establishing the interest rate corridor, with efforts focused on neutralizing inflationary pressures.

Looking ahead, the CBA plans to announce further adjustments to interest rate corridor parameters on July 31, accompanied by a press conference, to keep the public informed and ensure transparency in monetary policy decisions.

In economic developments, Azerbaijan's strategic currency reserves saw a notable increase of $1.3 billion or 1.8% in the first five months of 2024, reaching $69.7 billion. This growth underscores the country's robust financial position amid global economic challenges.

Moreover, recent data highlights the critical role of payment balance surplus in maintaining stability in the currency market. In the first quarter of 2024, the payment balance surplus relative to Gross Domestic Product (GDP) stood at 10.1%, indicating a strong foundation for economic equilibrium.

In response to changing economic conditions, the CBA has adjusted its sterilisation operations, considering the diminishing impact of non-monetary policy factors such as government account balances affected by surpluses in the state budget. This strategic move aims to optimise liquidity within the banking system.

The CBA emphasised that monetary policy instruments are deployed to align with financial market dynamics and liquidity shifts. The effective utilisation of these instruments ensures that average interest rates in the money market correspond closely with the Central Bank's interest rate corridor. By the end of June, the average interest rate on overnight unsecured transactions (AZIR) was recorded at 6.75%, slightly lower compared to May, yet maintaining alignment with the discount rate within the interest rate corridor.

Overall, these measures reflect Azerbaijan's proactive approach to navigating economic challenges while maintaining stability and fostering sustainable growth in its financial sector.

---

Follow us on Twitter @AzerNewsAz

Loading...
Latest See more