BAKU, Azerbaijan, March 27. Analysts predict that the Central Bank of Azerbaijan (CBA) will decide to cut the discount rate by 50 basis points to 7.25 percent, Trend reports.
According to Trading Economics forecasts, the discount rate will decrease by another 25 basis points to seven percent in the second quarter of 2024, with a reduction to 6.5 percent in the fourth quarter of 2024.
Meanwhile, the CBA lowered the discount rate to 7.75 percent from eight percent on January 31.
The upper limit of the interest rate band was reduced from nine percent to 8.75 percent, and the lower limit was reduced from 6.5 percent to 6.25 percent.
"This decision was adopted since actual and projected inflation is within the target corridor (4±2 percent), stabilization of inflation expectations, as well as the situation in the foreign exchange market. The annual inflation rate has declined since the last Monetary Policy Board meeting. The 12-month inflation rate stood at 2.1 percent in 2023 and was at the lower end of the target range (4±2 percent). A decrease in inflation was observed for all group components of the consumer basket. Annual food inflation amounted to 0.8 percent, non-food inflation was 2.7 percent, and inflation in the sphere of services was 3.7 percent. The dynamics of actual inflation also affected inflation expectations," the statement of the CBA noted.
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