The Central Bank of the Republic of Azerbaijan has approved new rules for calculating and disclosing the Azerbaijan Interbank Rate (AZIR), the benchmark rate for the unsecured interbank money market. The revised methodology is intended to support AZIR’s use as a reference rate for money market participants and as an auxiliary operational target for monetary policy, with publication under the new approach set to begin from 15 May 2025. Under the new methodology, transactions executed at rates that differ sharply from average market rates will be trimmed by excluding the highest and lowest 10% of such trades from the calculation to limit unwarranted volatility. The rules also introduce contingency calculation plans to maintain AZIR publication on days when the required number or volume of transactions is not available. In addition, the central bank will calculate and publish compounded AZIR rates for 30-, 90- and 180-day periods based on the daily AZIR observations over the relevant lookback window, and will publish a Compounded Accumulating Index based on daily AZIR with a base date of 1 November 2024 to allow market participants to derive compounded rates for non-standard reference periods.
Central Bank of the Republic of Azerbaijan 2025-05-15
Central Bank of the Republic of Azerbaijan approves updated AZIR benchmark methodology and adds compounded reference rates
The Central Bank of the Republic of Azerbaijan has approved new rules for calculating and disclosing the Azerbaijan Interbank Rate (AZIR), enhancing its role as a benchmark for the unsecured interbank money market and as an operational target for monetary policy. The methodology includes trimming extreme trades to reduce volatility and contingency plans for days with insufficient transactions. Compounded AZIR rates for 30-, 90-, and 180-day periods will be published, along with a Compounded Accumulating Index starting from 1 November 2024.