Central Bank of Azerbaijan maintains discount rate at 6.5%

BAKU. Oct 29 (Interfax) - The Central Bank of Azerbaijan (CBA) decided to keep the discount rate at 6.5% at its meeting on Thursday.

The lower bound of the interest rate corridor was kept at 5% and the upper bound at 7.5%, the CBA said in a press release.

In determining the parameters of the interest rate corridor, the dynamics of actual and projected inflation, processes in the currency market, changes in banking sector liquidity, and the latest trends observed in the global monetary environment were taken into account, the CBA said.

Inflation risks are mainly related to the situation in external markets. "Amid global geopolitical uncertainty, the risk of rising prices for energy and food, as well as the transmission of this growth to domestic prices through major trading partners, remains significant. The degree of this transmission will depend, along with other factors, on the dynamics of the nominal effective exchange rate of the manat. In the coming period, the Central Bank's inflation forecasts will be updated mainly depending on the extent to which these risks materialize. Under current fiscal and monetary policy, domestic demand is not expected to significantly increase inflationary pressure," the Central Bank said.

Further decisions on the discount rate until the end of the year will be made taking into account the inflation forecast, the dynamics of key macroeconomic indicators and the processes taking place in the currency market, the CBA said.

"Given the uncertainty in the global environment, forecasts for macroeconomic indicators will continue to be revised based on several scenarios," it said.

The next Central Bank meeting on the discount rate will be held on December 23.

As reported, at the first meeting on the discount rate in 2026 (on February 4), the Central Bank decided to lower it by 25 basis points (bps) to 6.5%, and at subsequent meetings on April 2, May 6, June 24, July 31 and September 4 it decided to maintain it at 6.5%.

The Central Bank of Azerbaijan held eight meetings on the discount rate in 2025, at six of which it decided to keep it and at two it decided to lower it each time by 25 bps, including to lower it from 7% to 6.75% in December.