Azerbaijan's central bank cut its benchmark refinancing rate by 25 basis points to 4.75 percent, "given a low level of inflation, growth rate of money supply as well as the priorities for diversification of the national economy," the Central Bank of the Republic of Azerbaijan (CBA) said.
The central bank, which cut its rate by 25 basis points in 2012, said the inflation rate declined considerably in 2012 and the manat's exchange rate had remained stable.
The inflation rate has been declining steadily since early 2011 when it was approaching 10 percent and fell to 1.10 percent in December from 1.2 percent in November and 4.8 percent in January.
The CBA's objective for monetary policy in 2013 is to maintain inflation at 5-6 percent and the pace of wage growth is currently exceeding the inflation rate by over 7 percent.
In December, when the central bank last cut its rate, the central bank's chairman said the bank could cut its rate again this year if the inflation trend continued.