The Management Board of the Central Bank of the Republic of Azerbaijan held the refinancing rate at 6.5% and the interest-rate corridor ceiling at 7.5%, while cutting the floor by 50 basis points to 5% effective 24 September 2026, with inflation within target and excess banking-sector liquidity supporting greater interbank activity. After 25-basis-point cuts in December 2025 and February 2026 lowered the refinancing rate from 7% to 6.5%, it was held through July. The lower floor is intended to encourage interbank transactions and reduce central bank participation in the money market, while the unchanged refinancing rate and ceiling are intended to stabilize inflation expectations. Annual inflation eased to 5.7% in August and remained within the 4±2% target range, with the medium-term forecast unchanged, while the structural liquidity surplus excluding required reserves reached AZN 6.3 billion. The central bank absorbed excess foreign currency supply, lifting its reserves to a record USD 15.3 billion, and may revise its 2026 current-account surplus forecast upward. Global geopolitical uncertainty continues to pose risks from higher energy and food prices and imported inflation. Further corridor decisions will depend on the inflation outlook, macroeconomic indicators, foreign exchange developments and banking-sector liquidity, with projections reviewed under multiple scenarios.
2026-09-23Central Bank of Azerbaijan
Central Bank of the Republic of Azerbaijan Holds Refinancing Rate at 6.5%, Cuts Corridor Floor to 5%
The Central Bank of Azerbaijan held the refinancing rate at 6.5% and the interest-rate corridor ceiling at 7.5%, while cutting the floor by 50 basis points to 5% from 24 September 2026. Annual inflation eased to 5.7% in August, within the 4±2% target range, while excess banking-sector liquidity supported the move to encourage interbank activity.