Fitch Solutions lowered its forecast regarding the monetary policy in Azerbaijan in 2024, APA-Economics reports citing the International Rating Agency.
Fitch Solutions forecasted that Azerbaijan's Central Bank will lower the interest rate to 7 % in this year.
“We forecast the CBAR to make a further 100bps worth of cuts to its key rate in 2024 to 7.00% at end-2024. Q423’s rate cuts took place against a backdrop of decelerating annual inflation. Retail sales picked up over H223 too. In our view, looser monetary conditions will encourage greater consumer confidence in 2024, resulting in higher consumption. Therefore, we forecast household consumption to rise from an estimated 3.0% year-over-year growth in 2023 to 4.0% in 2024,” Fitch Solutions added.
Note that, on January 11, Internationale Nederlanden Groep (ING) the international banking and financial services corporation of the Netherlands, has kept its forecast regarding monetary policy in Azerbaijan stable for 2024 to stand at 8%. ING only forecasted the CBA to reduce interest rate to 7.75% in the first quarter of 2025, and in the end of year, to be reduced to 7%.
Recalle that, the Central Bank of Azerbaijan reduced interest rate with its last two decisions. On the last time, on December 20 of last year, interest rate was decreased from 8,5 % to 8.00%, the lower limit of the interest corridor was decreased from 7.0% to 6.5%, and the upper limit of the interest corridor was decreased from 9.5% to 9.0% at the decision of the Board of the Central Bank of Azerbaijan.
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