Azerbaijan cuts rate 7th time as inflation in target range27th April 2019
Azerbaijan’s central bank cut its benchmark discount rate for the 7th time, saying inflation within the target range, stable inflation expectations and a favorable external environment allows for the continuation of normalization of monetary policy.
The Central Bank of the Republic of Azerbaijan (CBA) cut its rate by another 25 basis points to 8.75 percent and has now lowered its key rate by a total of 625 basis points since February 2018.
Azerbaijan’s headline inflation rate rose to 2.1 percent in March from 1.9 percent in February, within the bank’s target range of 4.0 percent, plus/minus 2 percentage points.
CBA said statement 12-month inflation in March was 2.5 percent, close to the bottom of the band, with food prices and non-food below general inflation while demand, non-monetary factors, monetary conditions and the exchange rate keeping inflation within the target range.
“Recent forecasts show that inflation will remain within the target (4+/-2%) during the rest of 2019,” CBA said, adding that international finance and credit organizations also predicted inflation will remain in single digits this year.
But by early 2015 the CBA was forced to abandon its dollar-peg and then later that year it also abandoned a dollar-euro basket peg.
In December 2015 the CBA then switched to a floating exchange rate regime that finally helped stabilize the exchange rate.
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