FX.co ★ Azerbaijan Holds Key Rate at 6.5%, Widens Rate Corridor

The Central Bank of the Republic of Azerbaijan left its discount rate unchanged at 6.5% at its September 23, 2026 meeting, marking the fourth consecutive decision to hold and keeping borrowing costs at their lowest level since September 2021. At the same time, the regulator lowered the lower bound of its interest rate corridor by 0.5 percentage points to 5%, while keeping the upper bound steady at 7.5%. This adjustment widens the corridor to stimulate interbank activity amid excess liquidity, while an unchanged key rate and upper bound are intended to anchor inflation expectations.

Annual inflation eased to 5.7% in August from 5.8% in July, remaining within the target band; core inflation was 5.1%. On the external side, foreign currency supply continued to exceed demand, allowing international reserves to grow by 32.9% in the first eight months of 2026 to a record $15.3 billion. The central bank reiterated that global energy and food prices remain the main upside risks to inflation, and said future policy decisions will depend on the inflation trajectory, conditions in the foreign exchange market, and banking sector liquidity.