The key interest rate in Azerbaijan is expected to decline to 6% by the end of 2026, 5.88% by the end of 2027 and 5.44% by the end of 2028, before reaching 5.66% by the end of 2029, stated in a forecast for Azerbaijan by Fitch Solutions, part of Fitch Group, APA-Economics reports.
According to the report, the Central Bank of Azerbaijan (CBA) is expected to pursue a cautious and data-dependent monetary policy in 2026–2027. The agency estimates that inflationary pressures will gradually ease during 2026–2027. Nevertheless, Azerbaijan will remain vulnerable to changes in supply chains due to geopolitical risks in the surrounding region.
The report notes that annual inflation in Azerbaijan reached 5.7% in June 2026, approaching the upper limit of the Central Bank's target range of 2–6%. Fitch Solutions partly attributes the intensification of price pressures to supply chain disruptions caused by the US–Iran war.
The agency states that rising inflationary pressures have slowed the interest rate reduction process initiated by the Central Bank in December 2025. Against the backdrop of persistent risks of rising prices, the regulator is expected to remain cautious in its upcoming decisions.
It should be noted that the Central Bank's key interest rate currently stands at 6.5%, while the upper and lower limits of the interest rate corridor are 7.5% and 5%, respectively. The CBA will announce its next decision on the key interest rate on October 29. The final interest rate decision of the year will be announced on December 23.
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