BAKU, Azerbaijan, October 29. The Central Bank of Azerbaijan (CBA) currently sees no major concerns about the impact of broad money supply growth on inflation, governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov said, Trend's correspondent reports from the event.
He made the remarks at a press conference on Thursday following a meeting on the parameters of the interest rate corridor.
According to him, bank lending has not increased sharply, and inflation risks remain under control.
According to him, one of the key factors determining the inflationary impact of money supply expansion is whether banks increase lending using funds they have attracted. However, no sharp increase in lending has been observed in this regard.
“The current situation does not concern us. The impact of money supply expansion on inflation through lending growth is largely linked to banks increasing lending using attracted funds. We are not seeing any sharp increases in this area,” Kazimov said.
The CBA governor emphasized that substantial funds remain available in the banking sector. According to him, banks have resources that could be directed toward lending without breaching existing regulatory requirements, but they are not making full use of this capacity.
“We are seeking to manage liquidity. There are nearly 6 billion manat ($3.5 billion) in available funds in the banking sector. Banks can use these funds for lending without violating existing requirements, but they are not fully utilizing them at present,” he said.
Kazimov added that, under current conditions, there are no major concerns about inflationary pressures stemming from broad money supply growth, and the situation remains under the Central Bank’s control.
