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Fitch: Azerbaijan's Central Bank to further increase the interest rate

06 June 2023 17:42 (UTC +04:00)

Fitch Solutions updated its forecast regarding the monetary policy in Azerbaijan in 2023, APA-Economics reports citing International Rating Agency.

Fitch Solutions forecasted that Azerbaijan's Central Bank will raise the benchmark rate to 9.25% in 2023. This is 1% more than the agency's January forecast.

"The population also faces elevated price pressures that have pushed real wage growth into negative territory; as of February 2023, inflation stood at 13.9% y-o-y, the highest rate recorded since the 2015 manat devaluation. Against this inflation backdrop, we also expect credit conditions to remain tight as the Central Bank of Azerbaijan continues to tighten policy rates. So far in 2023, the bank has raised the benchmark rate to 9.25% by year-end. We expect inflation to average 11.5% y-o-y in 2023 and 7.5% in 2024. Price pressures will gradually ease over the coming months but will remain higher than pre-pandemic levels of 2.5-3.0%," Fitch Solution added.