Central Bank of Azerbaijan decides to keep discount rate unchanged

19 March 2021 16:24 (UTC+04:00)

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The Board of the Central Bank of Azerbaijan (CBA) made a decision to keep the discount rate at the level of 6.25 percent on March 19, Trend reports referring to the CBA.

According to the CBA, the lower limit of the interest rate corridor was set at 5.75 percent, and the upper one - 6.75 percent.

The decision was made taking into account the latest changing tendencies for inflation, the possible impact of cost factors and demand on prices in the short and medium-term, stated the bank.

The analysis showed that the balance of inflation risks between the factors hasn’t notably changed. Rising oil and world food prices, improving external balance, exchange rate stability, which is the main political anchor, countercyclical fiscal policies and expected monetary expansion are counterbalancing factors. Despite a slight increase in non-monetary inflation, the core inflation remained stable. By the end of 2021, inflation is expected to remain within the target corridor of the CBA.

Besides, the Central Bank stressed that further decisions on the parameters of the interest rate band will be made taking into account the comparison of the actual and projected inflation with the target parameters and changes in the balance of risks in the horizon of the medium-term forecast.

The above decision will come into force on March 19, 2021. The next decision of the Central Bank’s Board on the parameters of the interest rate corridor will be announced on April 30, 2021 and a press conference will be held in this regard.

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