Fitch: Azerbaijani Central Bank's hedging program to help reduce foreign currency imbalances

The Central Bank of Azerbaijan's (CBA) hedging program, announced in August 2025, is intended to allow banks to convert their foreign currency funding into hedging instruments in manat for small and medium-sized enterprise (SME) lending, Maksim Maliutin, associate director, EMEA Bank Ratings at Fitch Ratings, said during the webinar "Fitch on the Caucasus: Sovereign and Banking Sector Perspectives for 2026," Report informs.

"This will reduce currency imbalances and improve pricing and lending conditions for borrowers. However, we will need time to assess the impact of this program on SME lending dynamics," Maliutin noted.

Fitch believes that banks are managing their accumulated risks quite effectively.

"It's absolutely certain that risk management today is at a much higher level than it was six or seven years ago. Nevertheless, we will closely monitor how the situation with this program develops over the next two years," he added.