FX.co ★ Azerbaijan Lowers Key Rate to 7%

The Central Bank of Azerbaijan reduced its refinancing rate by 25 basis points to 7% during its July 2025 meeting, signifying the first rate reduction since halting its easing cycle in the prior year. This adjustment brings borrowing costs to their lowest point since late 2021. Additionally, the interest rate corridor was modified, setting the upper limit to 8% and the lower to 6%. This move is aligned with the bank's evaluation of declining inflation trends, stable foreign exchange conditions, and the imperative to sustain monetary conditions that bolster economic activity. The bank highlighted that inflation remains within the target range of 4±2%, with core indicators exhibiting ongoing stability. As of June, the annual inflation rate was recorded at 6%, while core inflation was at 4.8%. Policymakers observed that the inflation risk balance remains mostly steady. Looking forward, the bank reiterated its commitment to a data-dependent approach in future policy-making decisions.