The Central Bank of Azerbaijan lowered its benchmark interest rate by 25 bps to 9.75 percent on October 30th, its fourth cut this year, as inflation rate continued to fall. Policymakers also pointed to further rate cuts next year if inflation expectations are anchored. Annual inflation was 2.6 percent in January-September, the lowest since early 2015. The central bank now expects inflation to be 3-4 percent at the end of this year, lower than an initial forecast of 6-8 percent. Interest Rate in Azerbaijan averaged 6.68 percent from 2005 until 2018, reaching an all time high of 15 percent in September of 2016 and a record low of 2 percent in December of 2009.
Interest Rate in Azerbaijan is expected to be 9.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Azerbaijan to stand at 7.50 in 12 months time. In the long-term, the Azerbaijan Interest Rate is projected to trend around 7.00 percent in 2020, according to our econometric models.