Azerbaijan’s central bank cut its policy rate for the second time this year and for the 14th time since February 2018 and said future policy decisions will be aimed at keeping inflation within its target range, maintaining financial stability and supporting economic activity.
The Central Bank of the Republic of Azerbaijan (CBA) cut its discount rate by 25 basis points to 7.0 percent and has now cut it by 50 points this year following a cut in January.
Since February 2018, when CBA began easing its monetary policy stance, the rate has been cut 14 times and by a total of 800 basis points.
Azerbaijan’s inflation rate eased to 2.9 percent in May from 3.0 percent in April and CBA said its updated forecasts point to inflation of 3.0 to 3.5 percent by the end of this year, within its target range of 4.0 percent, plus/minus 2 percentage points.
It added the situation on the foreign exchange market remained stable in May, with supply exceeding demand at its auctions, while the monetary base had risen 8.0 percent since the end of April but was still down 10.6 percent since the start of the year.
CBA said the negative impact from the Covid-19 pandemic on Azerbaijan’s economy was continuing in May and June, with a drop in all parts of aggregate demand though official data showed growth in the non-oil, gas and agricultural sectors in the first five months.
Retail turnover in the first five months was down 1.7 percent from the same period last year while investments in the non-oil sector had fallen 16.7 percent, CBA said.
Azerbaijan cuts rate 14th time, inflation seen in range
June 19, 2020
