Azerbaijan's Central Bank hikes refinancing rate to 7% pa

BAKU. Oct 29 (Interfax) - The Central Bank of Azerbaijan (CBA) has hiked the refinancing rate, or discount rate, 50 basis points from 6.5% per annum to 7% pa effective October 29, CBA Governor Elman Rustamov said on Friday during a press conference.

Rustamov said that the CBA has retained the lower threshold of the interest rate corridor at 6% pa and has raised the upper threshold from 7% pa to 8% pa.

"The decision assumes the economy will continue to come under pressure from inflation, and takes price growth in the world markets and high inflation in Azerbaijan's yarding partners into consideration," Rustamov said.

He said the CBA might hike the rate at its next meeting, too.

Inflation of 9.5-10.5% is expected for the year, he said.

The CBA's refinancing rate of 6.5% pa had been in effect since September 17 this year, when it was raised from 6.25%.