As part of improving the monetary policy strategy, CBA will continue to work to implement the conditions for a phased transition to the targeted inflation rate in Azerbaijan, according to the report.
In the long term, measures to revitalize the money market should enable the interbank market to turn short-term interest into an alternative monetary policy trap. This will allow CBA to achieve its inflationary goal by changing the interest rate.
The bank will continue its active work to ensure synchronized movement in the interest rate corridor of short-term interest rates in the interbank market. The formation of an interest-bearing operational framework by CBA will provide additional support for the activation of the monetary market.
Ensuring sustainability and stability of the fiscal system, increasing the health and depth of the financial and banking sector and the number of cashless payments, reducing dollarization, as well as increasing the efficiency of macroeconomic coordination will also accelerate the transition to a targeted inflation regime.
In addition, as part of the transition to the new regime, the CBA will further increase its analytical and forecasting potential and transparency of activity. Improving the quality of forecasting will allow determining and minimizing differences between the expected level of inflation and its target level.
Protection of the financial and operational independence of CBA will become one of the factors supporting price stability. New banking legislation should strengthen the institutional bases on accountability of the Central Bank of Azerbaijan, which include independence and transparency.
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