The discount rate was increased by the decision of the Board of the Central Bank of Azerbaijan.



"APA-Economics" reports that the interest rate was increased by 0.25% to 8.25%, the lower limit of the interest corridor was increased by 1.25 percentage points to 6.25%, and the upper limit of the interest corridor was kept unchanged at 9.25%.

The decision to narrow the width of the interest corridor was made by the Board of Directors of the Central Bank in August 2022 in accordance with the preliminary statements regarding the implementation of the new operational framework of monetary policy.

This decision is based on both actual indicators and updated macroeconomic forecasts.

The dynamics of the decrease in world food prices, the relative slowdown of inflation in trading partners affect the inflation level in the country over time.

Actual annual inflation has stabilized in the last 2 months, but still remains in double digits.

Uncertainties about the inflation environment for next year are high.

A double-digit growth of the monetary base is predicted at the end of the current year.

Under these circumstances, it was considered appropriate to tighten the monetary policy in order to limit the excess expansion of the aggregate demand.

In order to manage liquidity in the financial sector and to strengthen the effects of the parameters of the interest corridor on the interest rates in the short-term money market, it was decided to narrow the width of the interest corridor.

The pace, level and duration of monetary policy tightening will depend on the dynamics of annual inflation indicators and updated forecasts in the upcoming period.

In the event of a decrease in annual inflation indicators and forecasts, first a pause in monetary policy tightening and then the possibility of its reduction will be considered.