Fed decisions will not have severe impact on Azerbaijan, says Rustamov

The decisions of the US Federal Reserve System (Fed) will not have a severe impact on Azerbaijan, said chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov, Report informs.

"The Fed's interest rate decisions could create problems in developed markets with a large amount of foreign financial flows. In the context of low-interest rates, logically, when the Fed lowers interest rates, there may be cases of return of these funds," Rustamov noted.

He said that this situation could destabilize the financial markets as a whole: However, in general, there are no such flows in Azerbaijan. I think it will not have a severe influence on Azerbaijan.

On January 26, the Fed's Open Market Committee kept the discount rate at 0-0.25%.

The committee aims to maintain maximum employment and inflation in the labour market at 2% in the long run.

The Fed will increase government bonds on its balance sheet by at least $ 20 billion a month and mortgage-backed securities by at least $ 10 billion from February.

At the same time, the Fed will reduce the monthly withdrawal of assets from the market in February from $ 60 billion to $ 30 billion.

The Fed maintained the discount rate at 0-0.25% on December 3 last year.