15:36 - 16.12.2022

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December 16, Fineko/abc.az. Although inflation in Azerbaijan has stabilized over the past 2 months, it still remains double-digit, and there is high uncertainty for the next year.

The CBA informs that double-digit growth of the monetary base is forecast by the end of this year.

“Under these conditions, it was considered expedient to tighten monetary policy. In order to manage liquidity in the financial sector, it was decided to narrow the interest rate corridor, which also serves to maintain the attractiveness of savings in the national currency," the CBA said.

Tight monetary policy, its level and duration will depend on the dynamics of annual inflation indicators.

"In November, monthly inflation was 1%, and annual inflation was 15.1%. Annual core inflation was 14.7%. Among the factors determining its dynamics, external factors retain dominant position. Decrease in world food prices by 14% over the past 6 months and relative slowdown in weighted average inflation among partners affected the decline in inflation rates in recent months. But this effect occurs at intervals of 6-9 months.

Following the monitoring of real sector enterprises, compared with October, inflation expectations in November increased in trade and services, but remained virtually unchanged in the non-energy sector and decreased in construction. The analysis shows that inflation peaked (15.6%) in the previous month, and it is expected that it will decline. Despite the unambiguous inflation forecast for 2023, uncertainty about the inflationary environment remains high,” the CBA informs.