By Trend

The Board of the Central Bank of Azerbaijan (CBA) has made a decision to increase the discount rate by 0.5 percentage points - from 6.5 to 7 percent, Elman Rustamov, Chairman of the CBA Board, said, Trend reports.

Rustamov made the remark during a press conference on Oct.29.

According to him, the upper limit of the discount rate level was 7.5 percentage points, and the lower one was 8 percent.

"This decision was made on the basis of a forecast of short-term and medium-term inflation factors, taking into account the influence of increasing inflationary processes in the global economy, in particular, the increasing food and raw materials prices, transport and logistics costs in the national economy, as well as the processes of liberalization of regulated prices and tariffs amid growing balanced domestic demand," said Rustamov.

"These factors weaken the neutralizing effect of monetary and fiscal policy, increasing the role of inflationary factors in the balance of risks to price stability. Preventing inflation from deviating from the target in the forecast horizon determines the exit of monetary policy from the pause phase," the chairman said.

Further decisions on the parameters of the discount rate band will be made taking into account changes in the actual and forecast inflation indicators, the balance of risks, as well as the current state of the economy and the prospects for its development in the medium term.