The dynamics of deposits in national currency remain positive in Azerbaijan
December 26, 2021 11:27 am (UTC + 04:00 am)
The dynamics of national currency deposits remain positive in Azerbaijan, said Gulnara Khaidarshina, deputy head of the market research department of Russian bank Gazprombank. Tendency.
According to Khaidarshina, in November, deposits in Azerbaijani banks in national currency increased by 3.5% compared to the previous month and by 29% since the beginning of the year.
“We see this as a positive signal for Azerbaijani Eurobonds as the absence of a growing trend in dollarization is an important factor in supporting the sovereign ratings of this issuer,” she said. “In view of the continued cautious tone in the press release of the Central Bank of Azerbaijan (CBA), we do not rule out a further increase in the refinancing rate in January 2022 from 25 to 50 basis points, after which the ‘Azerbaijan regulator will have the opportunity to take a break from the tightening of monetary conditions. “
“The BCA will be able to address the issue of lowering rates in the second half of next year, provided that the inflation risks indicated in Friday’s press release do not materialize,” the bank representative noted. Russian.
Following the last ABC meeting this year, the regulator increased the refinancing rate by 25 basis points – up to 7.25%.
The upper limit of the interest rate band was raised by 25 basis points to 8.25%, while the lower limit was kept at 6%. The Central Bank noted the increase in inflationary pressures, mainly under the influence of external factors. At the same time, he stressed that the effect of previous rate hikes had already started to show.
According to the regulator’s estimates, the share of monetary factors in the formation of inflation is less than 10% and tends to decrease. At the same time, the stability of the USD / AZN rate made it possible to limit external inflationary pressures.
In addition, in a context of increasing external inflation risks, the Central Bank has again revised upwards the average annual inflation forecast to 6.3-6.6%, with inflation at the end of the year. year – at 11.4-11.9%, which is almost double the border of the target range.
At the same time, the regulator has shared its expectations for the path of inflation in 2022. In line with these, inflation will stabilize in the first quarter of next year, after which it will start to slow down and return to normal. the forecast range for the second half of 2022.