CBA: Inflation to remain at current level till late 2022

By Azernews

Azerbaijan's Central Bank (CBA) Executive Director Vugar Ahmadov has said that inflation in the country will remain at the current level until the end of 2022, Trend has reported.

"We have inflation forecasts based on various scenarios. All of them show that inflation will remain at the current level, approaching the upper limit of the target range," he said.

Ahmadov stated that Bank's inflation forecast for 2022 is four percent.

“The upper limit of the target range is six percent, but in the medium term we anticipate its approaching four percent," he said.

Impact of Russian banks' withdrawal from SWIFT

Speaking at the press conference, Bank's Executive Director Farid Osmanov stated that CBA is studying the impact of the withdrawal of Russian banks from SWIFT, as a result of military actions in Ukraine, on the banking sector of Azerbaijan.

He noted that the study is being carried out both at the level of local institutions and international commissions.

"Currently, there are no problems with settlement operations," he said.

Bill on payment services, systems

Osmanov also stated that the Bank, in agreement with the relevant government departments, has submitted a bill"on payment services and systems" to the government for consideration.

He also noted that in the first quarter of 2022, non-cash payments in Azerbaijan increased by 2.1 times compared to the same period of last year - up to AZN 4.4 billion ($2.6 bn).

Legal framework for financial sector

Bank's Board Chairman Taleh Kazimov said that CBA is currently working on updating the legal framework for the financial sector.

"Once this process is completed, a new legislative basis will be presented in the banking, insurance and financial sectors," he said.

Kazimov also noted that the Bank is considering the introduction of new financial instruments in the country. He added that the bank is aimed at developing the money market in the short-to-medium term.

"Implementing new financial instruments are currently being reviewed. The CBA is striving to ensure the profitability of the Azerbaijani manat," he said.

Additionally, the board chairman stated that the Bank has decided to leave the discount rate unchanged, at the level of 7.75 percent. He added that the upper limit of the interest-rate corridor remained at 9.25 percent, while the lower limit of it accounted for 6.25 percent.