Azerbaijan says monetization is at an acceptable level

Azerbaijan says monetization is at an acceptable level
# 04 September 2009 12:18 (UTC +04:00)
Baku. Vahab Rzayev - APA-ECONOMICS. Azerbaijan expects the money supply to grow by 10% to 15% by the end of this year, said Elman Rustamov, Chairman of the Central Bank of Azerbaijan.

According to statistics, there was a 20% decline in money supply during the first half of 2009.


Elam Rustamov also added that monetization (measured as M3/GDP) is currently at an acceptable level for the current macroeconomic circumstances.

The monetization level is for at (counting annual parameters of M2 and GDP) is at about 16%.

“This is not adequate for the economy. We need to pay attention to two contradicting processes: on the one hand, increasing money supply provides the economy with necessary financial resources but on the other hand, this increase leads to price hike and unsaturated expansion. The possibilities that a sharp increase in money supply may disturb the macroeconomic stability will be explored. Therefore, sweeping measures are not appropriate,” he underscored.
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