CBA to create conditions for optimal liquidity regulation by banks

Baku. 28 December. REPORT.AZ/ Money supply will be regulated by taking into account the economic growth and inflation predictions, as well as processes in the financial market and liquidity position of the banking system, Report informs referring to the Central Bank of Azerbaijan (CBA).

Moreover, the CBA will also pay attention to uninterruptedness of payments, meeting the economy’s demand for required liquidity.

In order to reach the inflation target, the CBA will use its monetary policy instruments adequately to macroeconomic situation, quantity parameters on these instruments will be quickly changed depending on the difference between forecasted and current inflation.

The CBA will form the new configuration of its different-period frame and open market operations in order to create condition for effective management of liquidity by banks.

"Access to financial instruments and keeping of mandatory reserves in monthly average mode will create conditions for the optimal liquidity regulation by the banks. A part of CBA’s open market operations will serve regulation of short-term liquidity, while the remaining part will promote regulation of long-term liquidity," the bank said.