Friday, January 31, 2020

Azerbaijan cuts rate 13th time, inflation seen in target

     Azerbaijan's central bank cut its benchmark interest rate for the 13th time, saying inflation had slowed since December and its latest forecast shows it will remain within the target range of 4.0 percent, plus/minus 2 percentage points in 2020.
     The Central Bank of the Republic of Azerbaijan (CBA) cut its discount rate by another 25 basis points to 7.25 percent and has now lowered it by 7.75 percentage points since February 2018.
     In December Azerbaijan's inflation rate of 0.5 percent was lower than expected, with the annual rate falling to 2.4 percent from 2.6 percent in November, according to CBA.
     Food price inflation, however, was 4.2 percent but CBA said this was due to higher prices on the global markets, especially for meat products.
     Economic activity in Azerbaijan, which is recovering from a banking crises and a prolonged economic downturn, remains positive, with real economic growth in 2019 of 2.2 percent and the non-oil sector expanding 3.5 percent, CBA said.
     The country's strategic foreign currency reserves rose US$986 million, or 1.9 percent, in January following at 14 percent rise in 2019 to US$52 billion.
     Among the risks to inflation, CBA said the coronavirus along with the slowdown in China is increasing the risk of volatility in global commodity markets, which has the potential to impact the macroeconomic situation.



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