OREANDA-NEWS. July 26, 2012. Management Board of the Central Bank held an extended meeting dedicated to the results of the first half of 2012. CBA Governor Mr Elman Rustamov addressing the meeting mentioned that Bank’s both current and strategic performance had contributed to the economic policy directed at sustainable growth and development of the country’s economy over the past period of 2012, reported the press-centre of CBA. 

Mr E.Rustamov stated that over 6 months of 2012 the economic growth rate in the country was 1.5%, and the non-oil sector grew by 11.3%. The volume of investments channelled to the non-oil economy rose by 30.2%. The surplus of the foreign trade balance constituted USD 7 bln, and strategic foreign exchange reserves exceeded USD 44 bln. Macroeconomic stability was preserved and average annual inflation was just 2.2%. In order to maintain a stable exchange rate of manat amid large surplus of the balance of payments, the Central Bank sterilized USD 639 mln. that resulted in only 0.11% strengthening of manat against USD. However, the real exchange rate of manat remained on a favorable level, and real price slide rate since the beginning of the year equaled 1,5%.

President Ilham Aliyev set the macroeconomic stability as the top priority at an extended meeting dedicated to socio-economic growth results of six months of the current year. Being guided by this priority, measures targeting a single-digit level of inflation should be further continued.

Development of the banking system was among the topics broadly discussed at the meeting; the Central Bank was focused on consolidation and restructurization of the banking sector. Critical measures were taken to that end. The prudential supervision was continuously adjusted to the new Basel III standards. The Bank ensured critical preparations for the Financial Sector Assesment Program (FSAP) to be implemented with international financial institutions in the following year.

The Bank achieved positive results on other directions over half year. The Central Bank implemented all tactical and strategic targets on management of foreign exchange reserves, further development of the payment systems within the e-Government concept, organization, management and optimization of cash circulation, and realization of the key legislative initiatives. Notwithstanding the instability dwelling on the world financial markets, foreign exchange reserves were managed in a stable and optimum manner, the volume of cashless payments followed an upward trend. The number of cards in circulation jumped 4%, while that of POS-terminals rose by 1.7 times. The Central Bank kept cooperating with related public structrues to stimulate cashless payments. The demand for cash was met in full and on time, emission jumped 8.3% over six months. The Bank continued activities oriented at alignment of the cash management to the best practices and creation of automated cash center. The Central Bank’s performance is becoming more and more transparent. The Bank spares no efforts on raising financial awareness of the population.

The Bank is implementing current operational targets along with programming and realization of strategic goals. Over 30 projects are under way on seven programs that target boosting effectiveness and institutional capacity of the Bank’s macroeconomic and financial stability policies, as well as more efficient implementation of other mandated functions. The Bank is providing a number of other critical projects to increase its contribution to the strategic economic policy.

It was mentioned that over the remainder period of the current year all institutional, organziational and staffing issues related to activity programs and projects need to be resolved here and now.

Mr E.Rustamov, winding up the meeting, overall positively evaluated the results of first six months of 2012, issued assignments and recommendations on implementation of upcoming objectives, strategic and tactical targets and highlighted that the Bank should, from now on, continue its activities so that the year of 2012 also became one of successful years, as President Ilham Aliyev declared at the meeting of the Cabinet of Ministers dedicated to the socio-economic results of the first half of 2012 and the tasks ahead.