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Azerbaijan Increases Key Bank Interest Rate

The Azerbaijani Central Bank has increased its key interest rate from 3 percent to 5 percent as of March 1, RFE/RL's Azerbaijani Service reports.

The bank said the move was made in response to a recent rise in food prices and was need to control inflation. It said the decision also aims to enhance efforts to stabilize the bank's money supply.

But Azerbaijani-based independent economist Samir Talibov told RFE/RL that any change in the interest rate would not affect rates that ordinary citizens pay for bank loans, which are already well above the main lending rate.

"Loans to consumers are [actually] being given at rates between 18-36 percent," Talibov said. "This rate will not rise [as a result of the interest rate increase]. Because even when the interest rate was 3 percent, banks received credits from the Central Bank at 14-15 percent, including bribes."

Talibov said it would be better for people looking for loans if the government's anticorruption drive worked to eliminate the practice of padding loans with bribes within the banking system.