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Azerbaijan’s central bank to keep inflation level at 4 pct in 2020

13 January 2020 [15:26] - TODAY.AZ

By Azernews


By Abdul Kerimkhanov

Azerbaijan’s Central Bank (CBA) intends to keep the country’s inflation rate at four percent in 2020 and maintain the stability of the national currency, banks head Elman Rustamov has said.

"In 2020, the Central Bank plans to maintain macroeconomic stability, one of the elements of which is to keep inflation low. Our inflation targets do not change - this is inflation at the level of 4 percent ± 2 percent. But in general, our goal is to keep inflation at four percent, which corresponds to the situation over the past three years," Rustamov said at a meeting with entrepreneurs and representatives of the banking sector on January 10.

Earlier, the CBA stated that in order to achieve the inflation target of 4 ± 2 percent, the Bank will adequately use all the tools and mechanisms that are in its arsenal and will keep in mind the effectiveness of the decisions taken.  

The CBA believes that a number of domestic and global risks may affect the achievement of inflation targets in 2020. Among the global risks, the Bank, first of all, notes a lower than expected growth in the global economy, continued protectionism and possible fluctuations in oil prices in the context of geopolitical instability.  

"To internal risks, it is worth noting the expansion of the money supply as a result of fiscal activity and fiscal deficit, inflationary expansion of consumer loans, as well as asymmetric expectations," the CBA stated.

The Azerbaijani government predicts an average annual inflation of 4.6 percent for 2020. By comparison, in 2019, the government forecasted inflation at the level of 2.8 percent.

The average annual inflation in Azerbaijan in 2018 amounted to 2.3 percent.

Earlier, Rustamov stated that under the strengthening of social policies and the expansion of domestic demand, the inflation rate remains low, which stems from a general improvement in economic management and stability of the manat (national currency).

In Azerbaijan, the average annual inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods.

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