Central Bank of Azerbaijan may reduce interest rate in next meeting

Baku. 2 May. REPORT.AZ/ Central Bank of Azerbaijan (CBA) has kept interest rate unchanged at 15 percent at yesterday's meeting.

Experts group of Report News Agency believes that at next meeting in mid-July, CBA will probably reduce interest rate. The interest rates in deposit auction for attraction of funds on May 1 dropped lower than 13 percent from around 15 percent established in early 2017. Established stability in currency market is regarded as the key reason for this. Thus, the commercial banks gained income around 13-15% in AZN equivalent, and even more in USD equivalent since February against the backdrop of strengthening manat. It means the banks who changed their USD reserves to AZN with 1.90 AZN/USD rate earned around 25% of income.

The experts group reckons that the current situation will not continue for a long time: “Because nowhere in the world such high real interest is available. That’s why it is expected that interest rates in coming auctions will slide to 10 percent. This will allow CBA to reduce interest rate to the level of 12 percent. The interest rate may drop to 10 percent by the year end”.