Central Bank of Azerbaijan holds refi rate at 6.5%
BAKU. July 31 (Interfax) - The Central Bank of Azerbaijan (CBA) is to hold the refinancing rate at 6.5%, it decided at a meeting on Friday.
The Central Bank said in a press release that the lower threshold of the interest rate corridor is to remain at 5.5% and the upper threshold at 7.5%.
The bank said that it had made its decision to take into account actual and forecast inflation trends, as well as the processes ongoing on the domestic financial market.
"The upward revision to inflation forecast supports a tighter monetary policy stance on the one hand, the significant excess of foreign exchange supply over demand supports a more accommodative policy stance, on the other. The offsetting effects of these factors justify keeping the parameters of the interest rate corridor unchanged," the CBA said.
Updated forecasts predict that inflation in Azerbaijan will be at 6.1% at the end of 2026 and slow to 5.8% in 2027. The bank said that this revision of inflation forecasts was due to the intensification of direct and indirect external factors "which are expected to be transitory over the medium term".
Future decisions on the refinancing rate will be based on changes to forecasts on inflation and the macroeconomic situation. "Given elevated uncertainty in the global environment, the Central Bank will continue to assess macroeconomic projections under alternative scenarios. In taking decisions on the parameters of the interest rate corridor, the Central Bank will take into account developments in the foreign exchange market and banking sector liquidity," the CBA wrote.
The regulator will hold its next rate meeting on September 23.
As reported, the CBA opted to lower the refinancing rate by 25 basis points (bps) to 6.5% at the first meeting of 2026 on February 4, and held it at this level at the subsequent meetings on April 2, May 6 and June 24.
The CBA held eight meetings on the refinancing rate in 2025. It held the rate at six of these and lowered it by 25 bps at the other two, including from 7% to 6.75% in December 2025.
