Central Bank of Azerbaijan Holds Refinancing Rate Steady at 6.5%

The Management Board of the Central Bank of Azerbaijan (CBA) has decided to keep the refinancing rate unchanged at 6.5%, maintaining the lower and upper bounds of the interest rate corridor at 5% and 7.5%, respectively. The policy stance reflects prevailing headline and core inflation metrics, an expanding liquidity surplus in the banking system, and favorable balance of payments dynamics.

In September 2026, 12-month headline inflation decelerated to 5.5% (with core inflation at 4.9%), tracking within the official target band of 4±2%. Foreign exchange market conditions remained characterized by structural oversupply: over the first nine months of 2026, net cash FX purchases by exchange booths outstripped sales by $759 million, household deposit dollarization dropped to 25.7%, and CBA gross foreign reserves expanded by 33.4% to $15.4 billion. Trade surplus stood at $10.5 billion, while net remittance inflows grew 70% year-on-year to $830.5 million. CBA projects current account surpluses of $8.5 billion (over 10% of GDP) for 2026 and $5.4 billion (over 6% of GDP) for 2027. Structural liquidity surplus expanded 2.2-fold to 6.2 billion AZN. Medium-term inflation is projected at 5.9% at the close of both 2026 and 2027. The next monetary policy decision will be announced on December 23, 2026.

N. Tebrizli