Azerbaijan will keep its key policy rate unchanged throughout 2026, Report informs, citing the Asian Development Outlook of the Asian Development Bank (ADB).
ADB emphasizes that monetary policy directions in the region until the end of 2026 will be multidirectional, driven by differences in domestic inflation levels and consumer demand.
According to the review, this year opportunities for further significant tightening of monetary policy remain given inflationary pressures in states such as Bangladesh, India, Indonesia, Pakistan, the Philippines, and Vietnam.
At the same time, policy rates will remain mostly stable in Armenia, Azerbaijan, Malaysia, China, and Thailand.
A gradual easing of monetary policy this year is forecast for Kazakhstan, Tajikistan, and Uzbekistan. In 2027, monetary policy in the region will begin shifting toward easing against the backdrop of gradually weakening inflationary trends, the ADB indicates.
Kazakhstan and Uzbekistan will continue the path of easing in 2027 after rate cuts in 2026, providing the most significant cumulative rate reductions in the region. Rate cuts are also expected in Georgia, Pakistan, Sri Lanka, and Tajikistan. In a number of other countries, rates will remain virtually unchanged, while in Azerbaijan, moderate growth is forecast against the backdrop of a favorable situation in the foreign exchange market and balanced inflation risks, the review says.
Overall, ADB analysts believe policy rates will gradually approach levels recorded before the escalation of the conflict in the Middle East, though specific paces and scopes of easing will be directly determined by inflation trajectories, economic growth dynamics, and external risks.
The Board of the Central Bank of Azerbaijan at its last meeting held on July 31 decided to keep the key rate at 6.5%.
In 2025, the Central Bank held 8 meetings on the key rate. At six of them, the parameter remained unchanged, while at two, the regulator decided to lower it - each time by 25 basis points.
The next review of the interest rate corridor parameters is scheduled for today, September 23.
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