Baku: The Central Bank of Azerbaijan is set to make a crucial decision on the country’s interest rate this week, as reported by APA-Economics, citing the Central Bank. The announcement will be made during a press conference scheduled for May 6 at the Central Bank’s headquarters.
According to Azeri-Press News Agency, earlier this year, the Central Bank had reduced the interest rate by 0.25 percentage points to 6.5%. The lower bound of the interest rate corridor was adjusted to 5.5%, and the upper bound was set at 7.5%. Despite these changes, the Central Bank decided to maintain the parameters of the interest rate corridor in their last decision on April 2.
The decision-making process involves careful consideration of various factors, including the alignment of actual and forecast inflation with the target range of 4±2%. Additionally, the Central Bank is monitoring risks associated with increasing geopolitical tensions in the nearby region, as well as the current state of global and domestic financial markets. Domestic macroeconomic trends and the characteristics of how monetary policy decisions affect the real sector are also evaluated.
The upcoming decision will focus on the direction of forecast and actual inflation, alongside updated macroeconomic analyses. The Central Bank aims to ensure that its monetary policy decisions are effectively transmitted to the real sector, impacting the broader economy.