Azerbaijan Interest Rate

The Central Bank of Azerbaijan cut its refinancing rate by 25bps to 7% during its July 2025 meeting, marking the first rate cut since pausing its easing cycle earlier last year and bringing borrowing costs to its lowest level since late 2021. The interest rate corridor was also adjusted, with the upper bound lowered to 8% and the lower bound to 6%. The decision reflects the bank’s assessment of a declining inflation trend, stable foreign exchange conditions, and the need to maintain monetary conditions supportive of economic activity. The bank noted that inflation remains within the 4±2% target range, with core indicators showing continued stability. As of June, annual inflation was 6% from 6.3% in May, while core inflation stood at 4.8%. Policymakers noted that the balance of risks to inflation remains broadly unchanged. Looking ahead, the bank reaffirmed its data-driven approach to future policy decisions.