Central Bank of Azerbaijan will view the issue of reducing the discount rate at its next meeting on August 1.
CBA said that the management, which held a meeting recently, noted the potential to reduce the discount rate from the 2H2017, depending on economic and inflation dynamics.
Currently, the CBA’s discount rate is 15%, annual average inflation makes up 13.8%. The inflation is mainly inductive and expected. It is basically caused by non-monetary factors, central bank of Azerbaijan said.
According to the survey held by Central Bank of Azerbaijan among the business sector and household, in the condition of stabilization of manat rate and neutralization of money supply, the inflation expectations are still significant despite they declined.
Central bank thinks that in the condition of lack of stable monetary condition and volatility, the inflation risks have been limited and expectations of both population and business should be reduced in the second half of 2017.
Central bank says the discount rate may be reduced depending on economic and inflation dynamics in the second half.
Central bank’s planned shift to the regime of targeting of inflation, expected results no deepening of financial stability, new fiscal rules will allow to manage the inflation risks more effectively in the medium term.
