January 31, 2020 / 11:09 AM / 19 days ago

UPDATE 1-Azerbaijan's central bank cuts refinancing rate to 7.25%

(Adds more info, details)

BAKU, Jan 31 (Reuters) - Azerbaijan’s central bank has cut its refinancing rate to 7.25% from 7.50%, governor Elman Rustamov told a briefing on Friday.

The central bank also adjusted its rate corridor, setting a lower boundary of 5.5% and an upper boundary of 9.0%, compared with 5.75% and 9.25% previously.

Rustamov had previously said the central bank planned to continue monetary policy softening in 2020, having cut the refinancing rate eight times in 2019.

“The stability of oil prices on international markets, low inflation as well as a stable macroeconomic situation in the country allowed us to cut the refinancing rate,” Rustamov said.

The central bank projects annual inflation at 4% with a possible deviation of 2 percentage points either way in 2020, he said. The government’s inflation projection for this year is 4.6%.

Rustamov said that the central bank’s strategic currency reserves rose 2% from the beginning of this year to $52 billion. The central bank and state oil fund’s total currency reserves rose in January by more than $1 billion.

The bank is due to hold its next policy meeting on March 19. (Reporting by Nailia Bagirova; Writing by Maria Kiselyova and Margarita Antidze; Editing by Hugh Lawson)

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