BAKU: The Central Bank of Azerbaijan (CBA) lowered the refinancing rate from 7.75 percent to 7.5 percent on March 28, Trend reports.

According to the CBA, the upper limit of the interest rate corridor was reduced from 8.75 percent to 8.5 percent, while the lower limit was kept unchanged at 6.25 percent.

“This decision was taken taking into account the comparison of actual and projected inflation with the target (4±2 percent), stabilization of inflation expectations, and changes taking place in the balance of risks. Reduction of the upper boundary of the interest rate corridor and the discount rate, taking into account the preservation of forecasted inflation at the target level, is aimed at easing monetary conditions. Keeping the lower boundary unchanged serves to optimize the width of the interest rate corridor. When determining these parameters of the interest rate corridor, the scale of their impact on interest rates in the interbank money market was also taken into account,” the commentary of the CBA re
ads.

The CBA emphasized that annual inflation rates have continued to decline since the last session.

“The 12-month inflation rate in February 2024 was 0.8 percent, and 12-month core inflation was 1.4 percent. Annual food deflation was 0.3 percent, non-food inflation was 1.4 percent, and service inflation was 2.3 percent. The decline in annual inflation is due to the influence of external and internal factors,” the CBA adds.

To note, the next decision of the Central Bank on the parameters of the interest rate corridor will be made public on May 1.

Source: Trend News Agency