The Central Bank of Azerbaijan has reduced the discount rate

The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate by 0.25 percentage points to 6.5%.

As reported by BAKU.WS, this was announced by the CBA.

According to the information, the lower boundary of the interest rate corridor has been reduced from 5.75% to 5.5%, and the upper boundary - from 7.75% to 7.5%.

"When making the decision on the interest rate corridor, consideration was given to the correspondence of actual and projected inflation to the target range (4±2%), the current situation in global economic activity and international financial markets, main trends in the domestic macroeconomic environment, as well as the transmission of monetary policy decisions to financial markets and the real sector.

Since the previous meeting, there have been no significant changes in the balance of inflation risks. The persistence of geopolitical tensions on a global scale, the strengthening of economic fragmentation trends, and instability in the global trade environment maintain uncertainty in commodity and financial markets at a high level. The main external risk is related to the transmission of import prices to domestic inflation. The realization of this risk will depend on such factors as inflation dynamics among trading partners, the direction of global commodity prices, as well as the volatility of the nominal effective exchange rate. The main domestic risk factor in 2026 may be a more significant than expected realization of domestic spending factors.

The next decision on the parameters of the interest rate corridor will be made based on the direction of projected and actual inflation, as well as the results of macroeconomic analysis. The CBA will continue to use all instruments at its disposal to ensure price stability," the CBA stated.

The decision takes effect tomorrow.

Information about the next decision on the parameters of the interest rate corridor will be made public on April 2.