ING Projects Azerbaijan Central Bank to Hold Key Rate at 6.50%

The Central Bank of Azerbaijan is set to keep its refinancing rate flat at 6.50% over the extended horizon despite heightened global inflation pressures, according to an assessment by Dutch banking group ING.

ING analysts classify Azerbaijan among economies with low baseline price pressures, noting that current domestic inflation of 4-6% is predominantly driven by cost-push factors rather than domestic demand. Consequently, no immediate monetary policy shifts are warranted, positioning Azerbaijan alongside Armenia as the only regional peers expected to leave policy rates unchanged.

By contrast, the report identifies Kazakhstan and Uzbekistan as economies navigating disinflation from higher baselines. While Uzbekistan may enact policy rate cuts over the course of the year, external price pressures will constrain wide-scale monetary easing across the broader region.

N.Tebrizli