OREANDA-NEWS. August 23, 2010. In the first six months of 2010 the Central Bank of the Republic of Azerbaijan conducted its policy under the conditions of slow recovery of global economic growth and non-equal course with world countries, increase of instability in the international financial and currency market, maintenance of favorable conjuncture in the global oil market, stable growth dynamics of the domestic economy, reported the press-centre of CBA.

Under the conditions of sharp volatility of the leading currencies of the world exchange rate of manat against USD has changed just 0.04% and in general remained stable. Significant surplus of the payment balance was the main macroeconomic factor of the stability of manat against USD. As usual, stability of the exchange rate of manat prevented increase in inflation, foreign debt burden of economic subjects and dollarization in the country, and in general, maintenance of real cash incomes of the population.

To support the business activity and economic growth under the conditions of current tends in the economic cycle, the Central Bank has not changed parameters of interest rate corridor and compulsory reserve norms, and maintained growth sources of money supply. Encouragement policy of the reduction of interest rates on deposits was continued. Within six months under these conditions, money supply in manats has increased by 7.5%, conditions for the decrease tends in interest rates were created.

Level of inflation that constitutes one of the main purposes of the monetary policy of the Central Bank was 4.9% in the six months of the current year against the respective period of the past year.

To strengthen financial stability of the banking system within this period, the Central Bank has improved its control and regulation frames. As a result, the banking system has maintained its financial resistance and continued to develop. Within the last six months of 2010 assets of the banking system has increased by 4.4%, and credit portfolio by 5.2%. Increase of the deposits of the population constituted 9.8%.

Given the abovementioned as well as the macroeconomic forecasts, Management Board of the Central Bank considered it reasonable to leave rates, parameters of the interest rate corridor and compulsory reserve norms unchanged, and continuation of the policy aimed at the maintenance of stability of manat.