The agency said the key factors for affirming the Baa3 rating and maintaining the stable outlook are:

1. Azerbaijan's fiscal resilience, supported by the State Oil Fund of the Republic of Azerbaijan's (SOFAZ) large assets, at more than 60% of GDP, and Moody's expectation that the country's government debt-to-GDP ratio will stabilize in 2016 at below 25%.

2. The country's sizeable fiscal buffers and the employment of a more flexible exchange rate, which will allow it to mitigate the impact of lower oil prices on the economy.

3. Azerbaijan's rating remains constrained by its low institutional capacity, low credibility and effectiveness of government policies as well as a weak banking sector and geopolitical tensions with neighbouring Armenia (Ba3 negative).

Azerbaijan's local and foreign currency deposit ceilings and local-currency and foreign-currency bond ceilings remain at Baa3/P-3.