In order to achieve monetary policy goals in 2018, Central Bank of Azerbaijan (CBA) will use its financial instruments adequate to macroeconomic situation, the quantity parameters on these instruments will be quickly changed depending on difference between forecasted and actual inflation, the CBA said in the statement on the main directions of the monetary policy for 2018 and the medium-term period, published on its website Dec. 29.
According to the statement, the CBA will keep active its different-period frame and open market operations in order to achieve monetary policy goals and create condition for effective management of liquidity by banks. Use of instruments will depend on liquidity situation in the banking system.
‘Transmission features of monetary policy will be taken into account while passing decisions of policy, the decisions will be adopted in the preventive mode. Monetary policy instruments will be improved depending on development level of monetary market. Effective achievement of operation goal, improvement of forecasting and monitoring of liquidity will continue. So, using its instruments and mechanisms, the Central Bank will try to keep the inflation at around 6.8%’, the statement said.
The main duty in the mid-term period is to strengthen sustainability of macroeconomic stability, to achieve quick and inclusive economic growth. Macroeconomic policy will first be directed to the law inflation. Low and predictable inflation eliminates uncertainties. Therefore, CBA sees the mode of targeting of inflation as a mode of optimal monetary policy. Works on realization of transition conditions to this mode will continue.