The Central Bank of Azerbaijan (CBA) has decided to reduce the interest rate by 25 points from 7.75 percent to 7.5 percent, Trend reports on Dec. 13 referring to the CBA.
At the same time, the lower threshold of the interest rate decreased from 6 percent to 5.75 percent, the upper threshold - from 9.5 percent to 9.25 percent.
This decision entered into force on December 13.
“This is the 8th reduction in the interest rate by the CBA in 2019,” the message said.
“The CBA decreased the interest rate from 9.75 percent to 9.25 percent on February 1, from 9.25 percent to 9 percent on March 15, from 9 percent to 8.75 percent on April 26, from 8.75 percent up to 8.5 percent on June 7, from 8.5 percent to 8.25 percent on July 26, from 8.25 percent to 8 percent on September 13 and from 8 percent to 7.75 percent on October 25,” the message said.
At the same time, inflation has not gone beyond the predicted level and remained below the average value of the target range since the recent meeting of the CBA's board on monetary policy.
A surplus current account balance, a stable exchange rate, adequate monetary conditions and low inflation expectations had a stabilizing effect on the prices.
“The risks for the medium term are mainly related to external factors, in particular, to a decrease in the global economic growth rate, the influence of this factor on oil prices,” the message said.
At the same time, an increase in the money supply as a result of growth in budget expenditure and inflationary expansion of consumer loans are among the internal risk factors.
The CBA will make the following decision on the interest rate, taking into account the level of conformity of real and forecasted inflation, changes in the macroeconomic situation and the likelihood of the implementation of the projected risks.
The next meeting of the CBA, during which the issue of the interest rate will be considered, will be held on January 31, 2020.
The interest rate decreased from 15 percent to 9.75 percent in 2018.
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