Central Bank of Azerbaijan lowers interest rate
The Board of the Central Bank of Azerbaijan (CBA) made a decision to reduce the interest rate from 6.5 percent to 6.25 percent.
At the same time, the lower limit of the interest rate band was set at 5.75 percent while the upper limit of the interest rate band - at 6.75 percent, according to the CBA.
In its statement, the CBA said that in terms of weakening external and domestic demand under the influence of the coronavirus pandemic, the actual and projected inflation rate remains below the center of the adopted target range, which shows that there is the potential for easing monetary policy.
The decision is aimed at easing monetary conditions in terms of the remaining equilibrium in the foreign exchange market, the growth of the supply of money, and the supply of credit investments.
On the other hand, the latest trends are observed in the global energy market and the prospects for their continuation in 2021 may support the improvement of the country's external situation and the expectations of economic entities.
The CBA stressed that further decisions on the parameters of the percentage corridor will be made taking into account the consequences of the pandemic, the pace of economic recovery, as well as the likelihood of realizing internal and external risks.
The abovementioned decision comes into force from the moment of adoption, that is, from December 18, 2020. The next decision of the CBA Board on the parameters of the interest rate corridor will be announced on January 29, 2021, and a press conference will be held in this regard.