Azerbaijan reduces discount rate

The Central Bank of Azerbaijan has reduced the discount rate by 0.25 percentage point from 7.5% to 7.25%.

This is reported on the website of the structure. 

The report says that the lower limit of the interest rate corridor was kept at 6.25%, while the upper limit was reduced by 0.25 percentage points from 8.5% to 8.25%.

‘This decision was adopted in view of the comparison of actual and projected inflation with the target (4±2%), stabilization of inflation expectations, and changes in the balance of risks. Reduction of the upper limit of the interest rate corridor and discount rate with regard to downward changes in the forecast inflation is aimed at easing monetary conditions. Keeping the lower limit unchanged, on the other hand, serves to reduce the volatility of inter-bank interest rates. When defining these parameters of the interest rate corridor, their potential impact on interest rates in the inter-bank money market was also taken into account,’ the CBA said in a statement.

This decision comes into effect from tomorrow. The next decision on the interest rate corridor parameters will be adopted on 21 June.