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Azerbaijan's central bank raises refinancing rate to 5 percent

Xinhua, February 16, 2016 Adjust font size:

Azerbaijan's Central Bank said on Monday that it was raising the refinancing rate to 5 percent from 3 percent, with immediate effect.

The move was aimed at creating conditions for the improvement of monetary policy tools in accordance with the situation in the currency market and strengthening the credibility of Azerbaijan's national currency by increasing volume of deposits, it said in a statement.

The lower limit of the interest rate corridor for liquidity operations was set at 2 percent, while the upper limit at 10 percent, according to the statement.

"Decline of foreign currency demand at auctions held by the Central Bank and consolidation of manat against foreign currencies can be regarded as the primary results to create foreign exchange market equilibrium," the statement said.

"The new exchange rate regime is being followed by the development of monetary and foreign currency market and risk management by economic agents," it added.

The Azerbaijan's Central Bank reaffirmed its intention to continue monitoring the macroeconomic processes and the situation in the financial market and responding gradually through monetary policy tools.

The previous rate had been in force since July 13, 2015. Enditem