Positive Changes Noted by Central Bank Associated Only with Growth of Oil Prices - Natig Jafarli

Baku / 22.06.17 / Turan: Positive change in statistics is due only to an increase in average annual oil prices, the economist Natig Jafarli said, commenting on the Central Bank's report on improving the country's balance of payments.

"Oil prices for the first five months of 2017 compared to the same period last year, grew by 30%. The average price was 55 dollars. At present, the price of oil is $ 44 and if it lasts for another 2-3 months, all the positive statistics of the Central Bank will change to negative," he said.

At the same time, Jafarli, referring to the possibility of reducing the discount rate (currently 15% - author), noted that even with a discount rate of 2.5%, which was several years ago, the credit interest of commercial banks was 20-25%.

"In other words, the change in the discount rate does not significantly affect credit interest. However, if in August the discount rate will be lowered, as a result, the money supply will increase, which will lead to a depreciation of the national currency," the economist believes.

Recall that the Central Bank said that, depending on the economic and inflationary dynamics, there is a potential for reducing the discount rate in the second half of this year and the Central Bank's board will consider the discount rate at a meeting on August 1.

In addition, the Central Bank believes that by the end of the year no significant changes in the manat rate are expected.

"Compared to the first quarter of last year, the deficit of 2.5 billion dollars was replaced for the same period in 2017 by a surplus of $ 0.7 billion. Over the past five months, the surplus of the foreign trade balance doubled compared to the same period last year," the Central Bank said. -----71D