BAKU, Azerbaijan, June 16. The Central Bank of Azerbaijan (CBA) is trying to limit inflationary pressure through monetary conditions, Director of the Monetary Policy Department of the CBA, Azer Aleskerov said during a panel discussion within the framework of the presentation of the World Bank’s report, Trend reports.
The CBA has increased the discount rate from 6.25 percent to 9 percent over the past year, intensified sterilization operations, and also implemented measures to improve the throughput of the interest rate channel.
Monetary policy instruments were implemented in a new configuration in September 2022. The instruments of permanent opportunities have become more active, the range of operations on the open market has expanded, and the procedure for differentiating the norms of mandatory reserves has changed.
The work carried out both on the introduction of local monetary policy instruments and on the development of financial market infrastructure is accompanied by the activation of the money market.
“The money market in Azerbaijan mainly consists of 2 segments: unsecured and secured. The unprotected segment runs on the Bloomberg platform. And the secured segment is the Repurchase agreement market operating on the platform of Baku Stock Exchange CJSC. The activation occurring in both directions creates conditions for the formation of representative percentage indices. These representative percentage indices are calculated on a daily basis and published," Aleskerov said.
“The positive thing is that the interest generated in both segments began to react to the CBA's interest rate corridor. We can say that the interest transfer of monetary policy is already working," he said.