PRESIDENTIAL DECREE OF THE AZERBAIJAN REPUBLIC

of May 31, 2005 No. 242

About strengthening of anti-inflationary measures in the Azerbaijan Republic

As a result of performed in recent years in the Azerbaijan Republic of purposeful economic policy social and economic development of the country accelerated, serious success in development of regions and entrepreneurship are achieved, the amount of the investments in economy considerably increased, notable promotion in development of not oil sector, creation of new workplaces, increase in the income of the population and reducing level of poverty is reached.

Along with it, since last months of last year, growth of consumer prices exerting negative impact on fixing of success achieved in the country in the field of economy and purchasing power of the population is observed. Excess by inflation of the expected level is connected generally with rise in price of import goods as a result of influence on production expenses of advance in price of crude oil in the world markets, increase in amount of the money supply which is in circulation and insufficient development of the mechanisms of attraction of excessive money supply to various financial instruments, with imperfection of structure sent to economy of investments, insufficiency of fight against monopolism in production, trade and import and export transactions, etc. by the reasons.

For restriction of negative impact of the factors increasing the rate of inflation for social and economic life there was need for implementation of number of the important measures connected with strengthening of control of increase in money supply in the address and expenses of the government budget, more effective management gradually of the financial resources of the country, forming growing in result of successfully performed oil strategy in economy of healthy competitive environment today.

For the purpose of preserving macroeconomic stability in conditions when economic development in Azerbaijan entered new stage, I decide mobilization of financial resources and increase in rationality of their use, protection of the existing favorable business environment and investment activity, and also social value of the performed reforms and the income of the population from pressure of inflation:

1. To the Ministry of Finance of the Azerbaijan Republic:

1.1. allocate the funds arriving in the government budget from the State oil fund of the Azerbaijan Republic it is exclusive on execution of target projects which financing is provided at the expense of this Fund;

1.2. taking into account environment of the financial market and the rate of inflation to organize release short-term, medium-term and long-term government bonds of loan, the government domestic advantageous bonds of loan and other securities. In a month to prepare and provide to the President of the Azerbaijan Republic offers on substantial increase until the end of the current year of amount of government securities;

1.3. in case of creation of the government budget for 2006 and the next years to perform the measures directed to enhancement of expense structure, reducing administrative expenses and preserving without increase in not oil deficit in the consolidated budget;

1.4. in the draft of the government budget for the next year and the next three years to provide increase in amount of the funds allocated for financing of projects of production infrastructure, strengthening of financial resources of National fund of the help to entrepreneurship of the Azerbaijan Republic and social protection of needy families.

2. To Central Bank of the Azerbaijan Republic:

2.1. take additional measures for the purpose of regulation of amount of money supply in the address, expansions of the security market and sales increase of the notes belonging to it;

2.2. perform adequate measures on enhancement of the mechanism of establishment of rate of manat in relation to foreign convertible currencies;

2.3. for the purpose of improvement of housing conditions of the population and the direction of free money supply on the real estate market to prepare and provide to the President of the Azerbaijan Republic the draft of the State program on creation and development of system of mortgage loan in a month;

2.4. for the purpose of suppression of calculations in foreign currencies in perfromed in the country purchase and sale transactions, including in retail chain stores, in a month together with the Ministry of taxes of the Azerbaijan Republic to prepare and provide to the President of the Azerbaijan Republic offers on acceptance of legal, administrative and organizational measures.

3. To the Ministry of Economics of the Azerbaijan Republic:

3.1. stir up the activities connected with fight against monopolism in the country and forming of healthy competitive environment, to take severe measures concerning violators of the legislation in this area;

3.2. for the purpose of ensuring intensive development of not oil sector, diversification of export and more complete ensuring requirements of the population due to local production together with the Ministry of Agriculture of the Azerbaijan Republic, the Department of Energy of the Azerbaijan Republic and local executive bodies within "The state program of social and economic development of regions of the Azerbaijan Republic (2004-2008)" to perform the measures stimulating production of competitive products of agricultural industry and processing industry and to regularly inform on it the President of the Azerbaijan Republic;

3.3. for the purpose of prevention of the facts of monopolization, restriction of the competition, the Section of the markets, use of contract prices (cartel arrangements) exerting impact on increase in prices in the consumer market to carry out monitorings on each goods market, to take severe measures according to the legislation and to quarterly inform on it the President of the Azerbaijan Republic;

3.4. together with the Ministry of taxes of the Azerbaijan Republic and the State committee of the Azerbaijan Republic according to the statistics to carry out monitoring of import, wholesale and retail selling prices of the consumer goods imported into the country and after generalization of its results quarterly to publish them in seal;

3.5. together with the relevant state bodies in three-months time to establish and submit to the President of the Azerbaijan Republic for review important infrastructure projects which implementation is provided within investing programs for 2006 and the next three years, and sources of their financing (including at the expense of means of the Oil fund of the Azerbaijan Republic);

3.6. for the purpose of providing in the course of privatization of objective assessment of state-owned property on the basis of the market principles and further increase in receipts in the government budget from this sphere to take adequate measures and to provide to the President of the Azerbaijan Republic the offers connected with it.

4. To the Cabinet of Ministers of the Azerbaijan Republic:

4.1. in a month to prepare and provide to the President of the Azerbaijan Republic the offers connected with effective management of the means which arrived in the government budget at the expense of difference between selling price of the oil exported about day of publication of this Decree, and the price provided for the budget calculations, and collected on the special account of treasury;

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