The Central Bank of Azerbaijan has reduced the refinancing rate from 7.25% to 7%, the interest rate corridor floor from 6.25% to 6%, and the ceiling from 8.25% to 8%.
The Central Bank said that the decision was made based on several factors: the alignment of actual inflation with the forecast trajectory and its position within the target range (4±2%), recent global economic developments, the domestic macroeconomic environment, continued stability in the foreign exchange market, and the effective transmission of monetary policy decisions.
As of June 2025, 12-month inflation stood at 6%. Price growth was recorded at 7% for food, alcoholic beverages, and tobacco products; 7.2% for services; and 2.8% for non-food products. Core inflation for the same period was 4.8%.
Although some external uncertainties persist, their impact on inflation has remained limited according to the Central Bank. According to the International Monetary Fund, the global commodity price index declined by 0.6% year-on-year in June 2025, including a 4.2% decrease in the food price index.
During the current year, supply has exceeded demand in the foreign exchange (FX) market overall, including both cash and non-cash segments. The continued decline in the dollarization of resident individuals’ deposits reflects positive expectations regarding the exchange rate, Bank's statement reads. External sector indicators—the key drivers of the FX market—remain favourable. According to the State Customs Committee, a foreign trade surplus of $1.4 billion was recorded in the first half of 2025.
Azerbaijan's Central Bank stated that global trade continued to contribute to volatility in commodity and financial markets. In this context, imported inflation remains an external risk factor, influenced by inflation in key trading partner countries and changes in the nominal effective exchange rate.
On the domestic front, the main source of inflationary pressure is the potential intensification of cost-push factors and rapid growth in aggregate demand. This underscores the importance of closely monitoring the medium-term effects of government spending and consumer lending on demand and price levels.
Under the baseline scenario, annual inflation is expected to stay within the target range throughout 2025 and 2026.
The July forecast projects inflation at 5.7% in 2025 and 5.3% in 2026. The consistency of these forecasts with the target range, combined with ongoing FX market stability, provides justification for a further easing of monetary policy, according to the Central Bank.
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Here's your AnewZ Daily Brief for 28 September 2026. These are the top stories making headlines in technology.
Saudi Foreign Minister Prince Faisal bin Farhan has arrived in Washington for talks with U.S. Secretary of State Marco Rubio on bilateral ties and key regional and international developments, Saudi state news agency SPA reported.
The European Union's decision to simultaneously advance accession talks with Ukraine, Moldova, Montenegro and Albania marks its most ambitious enlargement effort in more than two decades.
U.S. President Donald Trump has denied reports that he offered Iran sanctions relief and access to frozen funds in exchange for nuclear concessions.
In the marshlands of Malluba in southern Azerbaijan, Kamil Mammadov follows a routine that has been passed down through generations. His family has worked with medicinal leeches for centuries, harvesting and breeding a species known as Hirudo orientalis, or the Caucasian medicinal leech.
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Volkswagen’s supervisory board has approved a major overhaul aimed at cutting 100,000 jobs by 2030 as the German carmaker battles weaker sales, falling profits and intensifying global competition.
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