Central Bank of Azerbaijan plans radical reforms

Baku. 29 December. REPORT.AZ/ Central Bank of Azerbaijan (CBA) will give necessary support to ensure the sustainability of macroeconomic and fiscal stability achieved by its stabilizing balanced monetary policy, along with the government will focus its policy to keep the inflation in single digit level, will further improve the strategic and operation framework of monetary policy to increase its influence capacity on inflation.

For this reason, CBA will carry out radical reforms to form new macroeconomic and fiscal stability platform next year and midterm period.

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

The statement says that strengthening of macroeconomic stability and achievement the sustainable economic growth in the country is a main priority of midterm macroeconomic policy. Realization of it is possible by monetary policy that effectively manages the closely coordinated macroeconomic framework and expectations.

“Strengthening the sustainability of macroeconomic stability framework will be main purpose of CBA monetary policy in 2018, it focused on the decline of inflation expectations will be continued. CBA built up its monetary policy targets for 2018 considering the macroeconomic forecasts,” says the statement.

The estimations show that the predicted balance of payments and the volume of transfers from State Oil Fund will be enough to ensure the stability on the currency market in 2018.

The statement says, in 2018, CBA will continue its conservative monetary policy considering the relative easing of fiscal policy. With thus purpose CBA will ensure forming of adequate monetary condition.

"Taking into account the path of inflation and inflation expectations CBA will give priority to keep the real interest rate in positive zone. The volume of money supply will be regulated considering the economic growth and inflation forecasts, development on the financial markets and liquid position of banking system. Ensuring the non-interruption of payments, meeting the economy’s demand in necessary volume of liquidity will be at the center of attention. CBA will keep its various framework and open market operations active to create condition for the effective management of liquidity by banks and achieve its monetary policy targets,” reads the statement.