The Management Board of the Central Bank of the Republic of Azerbaijan left the refinancing rate at 6.5 % and kept the interest-rate corridor at 5.5–7.5 %, judging that February’s 5.7 % headline inflation and 5.6 % core inflation remain within the 4 ± 2 % target band but noting rising upside risks from escalating regional geopolitical tensions and cost pressures. After a cumulative 75 bp easing delivered in three steps between July 2025 and February 2026, unsecured money-market rates continue to trade inside the corridor and close to the policy rate, with the AZIR index easing to an average 6.47 % in March from 6.70 % in January as the central bank relied mainly on one-week open-market operations to absorb excess liquidity. The bank projects inflation to stay within target through end-2027, though recent trends suggest a possible upward revision to the 2026 forecast. The foreign-exchange market is stable: in January-February cash FX purchases exceeded sales by USD 51 m, resident household dollarisation fell to 27.7 %, and reserves rose 1.2 % to USD 11.7 bn; a USD 1.1 bn trade surplus underpins a forecast of continued current-account surpluses. Global supply disruptions and higher energy and logistics costs are amplifying imported inflation risks. Future adjustments to corridor parameters will hinge on updated inflation readings and risk assessments, with the central bank pledging to act if the outlook threatens to breach the target; the next decision will be published on 6 Ma
Central Bank of Azerbaijan 2026-04-02
CBAR holds refinancing rate at 6.5 %, keeps corridor at 5.5–7.5 %
The Central Bank of the Republic of Azerbaijan held its refinancing rate at 6.5 % and kept the interest-rate corridor at 5.5–7.5 %, citing February’s 5.7 % headline inflation as within the 4 ± 2 % target but flagging heightened geopolitical and cost-push risks; money-market rates remain near policy levels after a cumulative 75 bp easing since July 2025. The bank still projects inflation within target to end-2027 yet signalled readiness to act if pressures mount, with the next policy decision due on 6 May 2026.