Azerbaijan Holds Key Rate at 6.5%

2026-07-31 06:28 By Nicole Aliyah 1 min. read

The Central Bank of the Republic of Azerbaijan kept its discount rate unchanged at 6.5% for a fourth consecutive meeting in July 2026, maintaining borrowing costs at the lowest level since September 2021.

The interest rate corridor was also left intact, with the lower bound at 5.5% and the upper bound at 7.5%, as policymakers judged inflation risks to be broadly balanced.

Annual inflation stood at 5.8% in June from a 5.6% increase in the previous month, remaining within the bank's target range, while core inflation stood at 5.5%.

The central bank noted that foreign exchange supply continued to significantly exceed demand, helping lift international reserves by 19.5% to $13.8 billion in the first half of the year.

It reiterated that geopolitical tensions and higher global energy and food prices remain key upside risks to inflation, with future policy decisions guided by inflation forecasts, macroeconomic conditions, foreign exchange market developments, and banking sector liquidity.



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Azerbaijan Holds Key Rate at 6.5%
The Central Bank of the Republic of Azerbaijan kept its discount rate unchanged at 6.5% for a fourth consecutive meeting in July 2026, maintaining borrowing costs at the lowest level since September 2021. The interest rate corridor was also left intact, with the lower bound at 5.5% and the upper bound at 7.5%, as policymakers judged inflation risks to be broadly balanced. Annual inflation stood at 5.8% in June from a 5.6% increase in the previous month, remaining within the bank's target range, while core inflation stood at 5.5%. The central bank noted that foreign exchange supply continued to significantly exceed demand, helping lift international reserves by 19.5% to $13.8 billion in the first half of the year. It reiterated that geopolitical tensions and higher global energy and food prices remain key upside risks to inflation, with future policy decisions guided by inflation forecasts, macroeconomic conditions, foreign exchange market developments, and banking sector liquidity.
2026-07-31
Azerbaijan Holds Rates for 3rd Meeting
The Central Bank of the Republic of Azerbaijan kept its discount rate unchanged at 6.5% for a third consecutive meeting in June 2026, maintaining borrowing costs at the lowest level since September 2021. The interest rate corridor was also left intact, with the lower bound at 5.5% and the upper bound at 7.5%, as policymakers judged inflation risks to be broadly balanced. Annual inflation stood at 5.6% in May, while non-food inflation stayed relatively subdued. The central bank noted favorable foreign exchange market conditions, declining dollarization, and strong foreign currency inflows. External conditions also remained supportive, helped by higher energy prices and a stronger trade balance. However, policymakers warned that global inflation risks, including higher food, fertilizer, and transportation costs, could affect domestic prices. The bank reiterated that future policy decisions will depend on inflation dynamics, external developments, and overall macroeconomic conditions.
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Azerbaijan Holds Key Rate at 6.5%
The Central Bank of the Republic of Azerbaijan kept its discount rate unchanged at 6.5% in May 2026, while also leaving the interest rate corridor unchanged, with the lower bound at 5.5% and the upper bound at 7.5%. The decision reflects inflation remaining within target, with headline inflation at 5.6% in March 2026 and core inflation at 5.5%, driven by food, non-food goods, and services. External conditions remain supportive, with a solid trade surplus and improved current account outlook supported by higher energy prices and non-oil exports. The FX market showed excess supply, boosting reserves and reducing deposit dollarization, while liquidity stayed stable and money market rates remained near the policy rate. Inflation is projected at 5.9% in 2026 and 4.5% in 2027, remaining within target, though risks are tilted upward from global cost pressures, geopolitical tensions, and imported inflation. Future policy depends on inflation expectations and macroeconomic conditions.
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