2024-04-23 20:15:08
Cooperation with the World Bank (WB) will continue to contribute to building a more sustainable economy not only in Azerbaijan, but throughout the region.
As Day.Az reported on Friday with reference to Trend, Chairman of the Central Bank of Azerbaijan Taleh Kazimov said this while speaking at a meeting of the director’s group held as part of the Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington.
He noted that in an effort to ensure inclusive and sustainable growth, Azerbaijan has taken a decisive course towards economic diversification.
“Significant progress has been made in this regard. Over the past 20 years, gross domestic product (GDP) has increased fivefold. Exports of non-oil goods have increased approximately 9-fold over the past two decades. The non-oil sector has increased by 11% compared to 2022, reaching $3 .3 billion. Strategic foreign exchange reserves are estimated at $68.5 billion, which means a significant increase of 17% in 2023. Azerbaijan’s current account surplus amounted to $8.3 billion, representing 11.5% of the country’s total GDP in 2023. According to the base scenario of the Central Bank’s forecasts, the current account surplus is expected to be about $7 billion, and for the foreign trade surplus – $10.6 billion for 2024,” the head of the Central Bank said.
Kazimov added that the annual inflation rate in Azerbaijan is decreasing.
“In February 2024, twelve-month inflation was 0.8%, and twelve-month core inflation was 1.4%. Indirect impact through the prices of imported goods has been the main source of inflation in Azerbaijan over the past three years. In the post-pandemic period, the increase in inflation among trading partners has reached peaking at 22 percent in September 2022 and gradually halving during 2023. However, over three years, the nominal effective exchange rate of the manat grew by about 15 percent per year, which was the main factor in weakening inflation pressures. The CBA forecasts annual inflation at 5. 3 percent at the end of 2024,” Kazimov said.
He noted that the CBA has implemented a number of reforms aimed at strengthening the transmission of monetary policy.
“This includes the introduction of new monetary policy instruments and support for the development of the interbank market to improve monetary transmission. For the first time, the CBA published indices of base rates for unsecured (AZIR – Azerbaijan Interbank Rate) and secured (AINA – AZN Index Average) segments of the money market. The yield curve calculated for government bonds was published for the first time on the Central Bank’s website. Thanks to these reforms, the weighted average interest rates on both unsecured and secured transactions denominated in manat between banks in the money market for the first time steadily moved into the Central Bank’s interest rate corridor. reforms continue to strengthen the transmission of short-term interest rates in the money market to other interest rates, including rates on deposits and loans,” said the head of the Central Bank of Azerbaijan.
He noted that during this time the stability of financial institutions, financial markets and financial infrastructure has been ensured.
“The high positions in terms of capital adequacy and liquidity of banks, which over the past 2 years amounted to about 18% and 60%, respectively, are twice the norms. The loan portfolio of banks over the past 3 years has grown steadily by 17.9% without compromising price stability in country, the share of non-performing loans decreased in February to 2.8% due to the improvement in the quality of the loan portfolio. Significant progress was achieved in terms of de-dollarization. Household savings in foreign currency decreased to 35.3% in February,” Kazimov said. .
He added that the CBA presented for the first time a new strategy, which focuses on the priorities of supervision and regulation in the banking sector, as well as plans for the development of the financial sector.
“The strategic objectives of the Financial Sector Development Strategy 2024-2026 include increasing financial inclusion and promoting the diversification of financial instruments, increasing efficiency, ensuring transparency and strengthening the resilience of the financial sector. Supporting professional growth of the market is the core of this strategy. This strategy reflects our commitment to the transition towards sustainable financing, which will become an effective mechanism in combating climate-related risks at a systematic level,” said the head of the Central Bank.
Kazimov also noted that Azerbaijan will host COP29 this year.
“2024 marks the “Year of Solidarity for a Green World” in Azerbaijan. The adoption and hosting of COP29 is recognition of Azerbaijan’s efforts to address climate change not only nationally, but also regionally and globally. Our role as COP29 Chairmanship provides an important an opportunity to engage our international partners in advancing climate action for the benefit of our planet. COP29 will prioritize finance as a critical tool for action that will help us raise our ambitions. We truly believe that working with the World Bank will help us continue to build more. sustainable economy not only in Azerbaijan, but throughout the region,” he concluded.
It should be noted that on April 15, the Spring Meetings of the International Monetary Fund and the World Bank Group started in Washington.
Major ministerial meetings and events will be held April 17-19, and other meetings will be held April 15-20.
Key events include meetings of the Development Committee and the International Monetary and Financial Committee of the IMF, which discuss the progress of the work of the World Bank Group and the IMF.
The Spring Meetings bring together central bankers, finance and development ministers, parliamentarians, private sector representatives, civil society organizations and academics to discuss issues of global concern, including the global economy, poverty eradication, and economic development.
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