Azerbaijan’s Central Bank to tighten monetary policy in 2017

He made the remarks at a plenary session of the Azerbaijani parliament in Baku Dec. 6 in discussions on the draft state budget and the concept of socio-economic development for 2017 and the next three years.

"Due to transition to a floating exchange rate of Azerbaijani manat, we switched to targeting of the growth of money supply,” Rustamov said. "Our main goal is to prevent additional currency emission and not to exert pressure on the manat exchange rate and, thus, to prevent the growth of inflation.”

Rustamov added that the volumes of sterilization will be increased in 2017 to ensure financial stability and liquidity of the banking sector, and interest rates will be revised if necessary. At the same time, in 2016, the CBA already withdrew about 6 billion manats for sterilization of the money supply, he noted.

"We plan to increase the flexibility of Azerbaijani manat and neutralize the existing negative expectations related to the macroeconomic stability,” Rustamov said.

Fiscal policy plays an important role in ensuring macroeconomic stability and an additional consolidation is needed in the medium term in this context, Rustamov added.