Azerbaijan’s Central Bank (CBA) will carry out tight monetary policy in 2017, the CBA Chairman Elman Rustamov said.
“Due to transition to a floating exchange rate of Azerbaijani manat, we switched to targeting the growth of money supply”, Rustamov said. “Our main goal is to prevent additional currency emission and not to exert pressure on the manat exchange rate and, thus, to prevent the growth of inflation”.
Rustamov added that the volumes of sterilization would be increased in 2017 to ensure financial stability and liquidity of the banking sector, and interest rates would be revised if necessary. At the same time, in 2016, the CBA already withdrew about 6 billion manats for sterilization of the money supply, he noted.
“We plan to increase the flexibility of Azerbaijani manat and neutralize the existing negative expectations related to the macroeconomic stability”, Rustamov said.
Fiscal policy plays an important role in ensuring macroeconomic stability and an additional consolidation is needed in the medium term in this context, Rustamov added. (Trend/Business World Magazine)