Bank Of Baku

Real interest rate on deposit drops 1.7 times in Azerbaijan

Real interest rate on deposit drops 1.7 times in Azerbaijan
# 27 December 2010 09:16 (UTC +04:00)
According to APA-Economics calculations, as of November 1, 2010, real annual interest rate on deposit made 6.66%.

In general, as at the same period, the average interest rate on manat deposit was 11.96%, down 1.25 percentage points compared to a year ago. Decrease of interest rate on deposit made inflation to increase. This has cheapened real interest rates. Thus, inflation made 5.3% in January-October, 2010, while it was 1.7% last year.

At the same time, to note that, real interest rates on deposits are event below the inflation, in several countries, except Azerbaijan. But, if inflation increases, the real interest rate on deposit may decrease. Because of, there is not any indexation for increase of interest rate in Azerbaijan-based banks.
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