15 February 2016, Baku: The Central Bank of the Republic of Azerbaijan continues efforts to maintain macroeconomic stability and sustainability taking critical actions to apply an operational framework in harmony with the new exchange rate regime and attain stability in the forex market. Supply prevailing over demand in recent auctions by the CBA, as well as manat’s slight appreciation against foreign currencies may be assessed as initial results on equilibrium in the forex market. The newly applied exchange rate regime is being accompanied with the development of both the money market and the risk management by economic agents.
The usage of the national currency as a savings facility is affected by the stability in the forex market, banks’ more attractive interest rates on deposits denominated in the national currency, as well as placement of government bonds in the national currency with higher yields compared to those in a foreign currency.
The Management Board of the Central Bank decided to set the refinancing rate at 5%, the floor of the interest rate corridor on liquidity operations at 2%, while the ceiling at 10% from 15 February 2016 onward to boost confidence in the national currency, promote growth of manat deposits, and allow the improvement of monetary policy tools under the conjuncture of the money market.
The Bank took the decision in question in reliance on the forecast of critical macroeconomic indicators and the goal of attaining sustainable price stability in a medium run.
The CBA will further follow the macroeconomic environment and, if necessary, flexibly respond via monetary policy tools in a staged manner.