Central Bank decreases discount rate
By Abdul Kerimkhanov
The Central Bank of Azerbaijan (CBA) has decided to decrease the discount rate from 8.75 to 8.5 percent.
As factors for substantiating this decision, the CBA points to the situation with the inflation rate in Azerbaijan, favorable external conditions and new macroeconomic expectations.
"The 12-month inflation target was 3.1 percent in April 2019. There was the rise in prices for food and services (3.5 percent and 3.8 percent, respectively) within the target range," said in a message.
The prices for non-food products increased by 1.4 percent in May, and there was a significant decrease in food prices in the consumer basket under the influence of seasonal factors.
The CBA indicates that in January-April, exports of goods increased by 25.4 percent, including export of non-oil goods by 19.9 percent. The trade surplus made up $2.5 billion.
The country's strategic currency reserves increased by 6.2 percent compared to the early 2019 to $47.5 billion.
The international conjuncture remains favorable for Azerbaijan. Oil prices have risen by 24 percent since the beginning of the year. World food prices in April decreased by 2.2 percent compared to the same period of 2018.
Real interest rates remain positive, which neutralizes external and internal inflation risks.
This is the fourth reduction in the discount rate by the CBA in 2019. Since the beginning of the year, it decreased on February 1 (from 9.75 to 9.25 percent), March 15 (from 9.25 to 9 percent) and April 26 (from 9 to 8.75 percent). CBA will consider this issue once again on July 26.
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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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