The Government would not agree with IMF to issue securities to clear the budgetary deficit.

The exchange rate of the Azeri national currency is falling, but there is no adequate raise of the consumer prices, which results in deflation. Azer-press learned from the economy ministry, that the government_s economic team would discuss with the IMF mission a set of issued primarily concerned with overcoming deflation. According to experts, although USD 1 already equals as much as AzM 4340, the consumer prices have only risen by 101.1 pc. Economists believe that the growth must be provoked, for instance, by artificial curbing of the import flows. However, as to exactly what measures are suggested in the NBA_s monetary and credit policy is something the economy ministry do not have the foggiest so far.Another problem is with a source to clear the budgetary deficit that has been registered at AzM 479 bn, or 2.9 pc of the GNP - this is too hard, say the IMF experts. They believe in the economy ministry, that this deficit was designed to be covered by non-inflation means (from bonuses, credits and with T-bills). We were told that the ministry would be objecting to the IMF_s proposal for covering the deficit with new emissions of securities (other than T-bills). The ministerial officials explain that Azerbaijan could only undertake such a measure in the event that 100 pc of the taxes were collected to guarantee the return of the securities in circulation. However, there is no confidence in this so far, and Azerbaijan cannot go for that and then share the fate of Russia. Therefore, the government asks for new credits from the IMF.