Azerbaijan’s central bank cut its benchmark discount rate for the 8th time since February last year, saying the cut takes into account that inflation is below its target, inflation expectations are stable, the external environment is favorable and the latest economic outlook.
The Central Bank of the Republic of Azerbaijan (CBA) cut its discount rate by a further 25 basis points to 8.50 percent and has now lowered its by a total of 650 points since February 2018.
It is CBA’s fourth cut this year, with the rate being cut by a total of 125 points this year.
CBA said further decisions about the interest rate will be based on the forecast for inflation, inflation expectations, the external environment and financial markets’ response to this.
Azerbaijan’s inflation rate rose to 2.4 percent in April from 2.1 percent in March, but CBA said this was below its target of 3.1 percent.
CBA forecast inflation by the end of 2019 will remain within its target range of 4.0 percent, plus/minus 2 percentage points.
While inflation expectations are stable, CBA said agricultural prices will have a declining effect on food inflation of the next few months given seasonal changes.