The Federal Reserve has finally increased interest rates in an effort to curb inflation.
Miraz.TV reports that the US Federal Reserve (Fed) has raised interest rates by 0.25 percentage points and hinted at the possibility of another hike before the end of the year.
The Fed’s Battle Against Inflation
These measures are aimed at controlling inflation and are also significant regarding the relationship between Fed Chair Kevin Warsh and US President Donald Trump.
Following the decision made on Wednesday, Fed officials stated: “Today’s monetary policy decision will support a more timely return of inflation to the Committee’s 2 percent target.”
This marks the first interest rate hike by the US Central Bank since July 2023.
Will This Decision Affect the Manat?
Speaking to Miraz.TV about the matter, Akif Nasirli, chairman of the Azerbaijan Liberal Economists Center, said that the 0.25 percentage point increase in the discount rate will primarily add value to the dollar:
“The pace of inflation in the United States will slow down somewhat. However, this decision will have no effect on the exchange rate of the manat. This is because there is no floating exchange rate in Azerbaijan. The exchange rate of the manat against the dollar is determined administratively by the Central Bank of Azerbaijan. Therefore, the manat’s exchange rate depends more on the decisions of the CBA. And for 10 years now, 1 dollar has been 1.70 manats.”
