Azernews.Az

BAKU – Inflation in Azerbaijan may exceed official projections in 2011 that stand at 5 percent, the country’s central banker has said.

Central Bank chairman Elman Rustamov told journalists there was a risk that price increases will be above the expected level next year. He cited higher prices for imported goods, for instance, those for grain and grain products.

Rustamov said price rises are already being reported this year.

"The period of seasonal deflation is now left behind. We are anticipating the Statistics Committee’s figures for September. If such a threat arises, we might review the crediting and exchange rate policies and are [already] working on that."

Azerbaijan’s draft state budget for 2011 indicates the average rate of US dollar at 0.8040 manats. However, Rustamov noted that the rate may change, depending on the overall economic situation in the country, adding that devaluation of the figure was out of the question.

The central banker said further that high liquidity is being seen in Azerbaijan’s currency market. In January-September, the Central Bank received currency worth up to $1 billion from the domestic market. The process is underway and the figure may double by the end of 2010. Thus, the supply of currency considerably exceeds demand.

"We are having to acquire dollars and sterilize them so that the rate of manat would not strengthen excessively," Rustamov said.