Taleh Kazimov admitted that discount rate is inefficient mechanism

Baku/13.06.23/Turan: The effectiveness of the discount rate of the Central Bank of Azerbaijan (CBA) is unsatisfactory. It takes time for this mechanism to work.

This was announced on June 12 at a meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship by the Chairman of the CBA Taleh Kazimov.

However, the chief banker also noted that ”there is consolation“: "the change in the discount rate affects the change in the interbank interest rate. We are glad that this transmission has started working.”

Independent experts in the country periodically state that the discount rate in Azerbaijan is an inefficient mechanism. In their opinion, banks practically cannot use cheap credit resources of the Central Bank. 

This is evidenced by the statistics published by the CBA. At the end of April, the amount of funds raised from the Central Bank of local banks amounted to 108.6 million manats which makes up just 0.3% of the banks' liabilities. Therefore, when the regulatory body raises or lowers the discount rate (increases or reduces the cost of loans provided to them), its impact on the market is not felt. -0-