Finance

Finance

CBA carries out $2.1 bln currency sterilization this year

25 December 2013 14:39 (UTC +04:00)

According to statement, the Central Bank participated actively in the conduction of economic policy by the government this year. CBA implemented nearly 40 projects directed to acceleration of institutional development in 2013.

The stability of the prices in the country has been ensured, inflation remained within the target in 2013. The statement says according to WEF report, Azerbaijan is one of the 7 countries with the lowest inflation. Though it’s observed two-digit growth in non-oil sector, high consumption and investment demand, average annual inflation made 2.3% in 11 months. Slow rise of food prices in the world market and stability of exchange rate of manat are main factors for low inflation. Increase of food supply from domestic production also has stabilizing impact on the prices. Inflation on food products stood at 2.2%. Annual average base inflation is lower 1.6 percentage point than total inflation and this indicates that role of monetary factors in price rise is low.

Average inflation in the countries which are trade partners with Azerbaijan exceeded domestic inflation by 2 percentage points. At the late 2013, the domestic inflation is expected to be lower than in CIS, developing countries and word countries. Low inflation compared to partner countries played an important role in saving of competitiveness of non-oil sector.

Generally, the exchange rate of manat has been formed since early 2013 in the condition of significant surplus in BOP and under the pressure of purposeful exchange rate policy of the CBA. CBA conducted its exchange rate policy within the frame work of targeting of dollar/manat bilateral exchange rate. CBA did not allow rising of manat in higher temp in the condition of active usage of surplus and a part of incomes for economic development. For this purpose, $2.1 bln foreign currency has been purchased from currency market. Consequently, exchange rate of manat against dollar strengthened 0.08%. Stability of exchange rate was one of the factors influencing macroeconomic and financial stability, as well as economic competitiveness.