The strengthening of the Azerbaijani manat against the currencies of the country's trade partners helps reduce imported inflation, Central Bank of Azerbaijan, CBA, Chairman Taleh Kazimov said at a press conference today, Report informs.
According to him, this, in turn, has a positive effect on preventing price increases in the domestic market and easing inflationary pressure.
"Inflation forecasts are prepared taking into account several key factors, and under current conditions, the impact of these factors allows us to make more optimistic inflation forecasts. In managing inflation, the main factors affecting price growth are inflation processes among our trade partners and cost factors. In this regard, we mainly monitor agricultural producer prices. The main factor reducing inflation is the nominal effective exchange rate," Kazimov said.
He noted that higher energy prices on global markets lead to a strengthening of the US dollar index, which results in the manat gaining value against other currencies.
"To put it simply, when energy prices rise on global markets, the dollar index also strengthens. A stronger dollar index means that the manat also strengthens against other currencies. As a result, the manat's exchange rate strengthens against the currencies of the trade partners from which we import, causing us to import less inflation into the country. We should take into account that 80% of our non-oil and gas imports come from trade partners that export energy resources," he added.