CBA minimizes interference in foreign exchange market

Baku. 29 December. REPORT.AZ/ Taking into account the ability to effectively absorb external shocks, the Central Bank of Azerbaijan (CBA) will maintain floating exchange rate regime. The CBA can intervene in the currency market in a limited number and volume in order to prevent short-term fluctuations of the national  currency rate, which are not coming from the fundamental macroeconomic factors.

Report informs referring to the CBA statement on the priorities of monetary policy for 2018 and midterm period.

Monetary policy tools will continue to improve depending on the level of money market development.

Efforts will be continued to improve the liquidity monitoring and forecasting system, which helps effectively achieve operational objective.

The CBA sees inflation targeting regime as an optimal monetary policy regime. Works in realization of conditions for switching to this mode will be continued.

The Central Bank will continue its activities to expand cashless payments.

The Central Bank will maintain its diverse framework and open market operations to enable banks to effectively manage liquidity and achieve monetary policy goals. The use of tools will depend on the liquidity condition of the banking system. The statement reads that if the structural liquidity profile exists, the CBA may expand its sterilization portfolio.