The Management Board of the Central Bank of Azerbaijan (CBA) has decided to lower all parameters of the interest rate corridor by 0.25 percentage points - the refinancing rate has been reduced to 6.5%, the floor of the interest rate corridor to 5.5%, and the ceiling to 7.5%, Report informs, referring to the CBA.
The decision has been made considering the alignment of actual inflation with the forecasted target range (4±2%), global economic activity and the current stance of financial markets, domestic macroeconomic developments, as well as the transmission of monetary policy decisions to financial markets and the real sector.
There has been no significant change in the balance of inflation risks since the last meeting. Persisting global geopolitical tensions, increasing economic fragmentation trends and global trade uncertainty continue to keep commodity and financial market-related uncertainties elevated. The key external risk factor relates to the transmission of import prices to domestic inflation, which will depend on the dynamics of inflation in trade partner countries, developments in global commodity prices, and volatility in the nominal effective exchange rate. On the domestic side, the main risk in 2026 is the potential for domestic cost pressures to exceed expectations.
Decisions on the interest rate corridor parameters will depend on the dynamics of forecasted and actual inflation, as well as insights from macroeconomic analyses. The Central Bank will continue to employ all available tools to ensure price stability.
This decision takes effect on February 5, 2026. The next decision on the interest rate corridor parameters will be made public on April 2, 2026.