The Central Bank of Azerbaijan (CBA) is keeping its previously announced average annual inflation forecast unchanged: 6.1% for 2026 and 5.8% for 2027. CBA Governor Taleh Kazimov said this in an interview with Global Finance magazine, FinFly reports.
According to him, ensuring price stability remains the regulator's key objective.
"Despite risks of supply-side inflation acceleration, both figures are within the established corridor," Kazimov noted.
The CBA head explained that the main task is not to revise the target, but to further develop the interest rate transmission channel and strengthen its impact. At the same time, exchange rate stability should remain the primary anchor, with interbank rates serving as a secondary anchor for domestic inflation.
Kazimov recalled that since September 2022, an active interbank money market has been built from scratch in the country.
"AZIR – the reference interest rate on the unsecured interbank money market – has held the status of our secondary operational target for over a year. Currently, the average spread between it and the monetary policy rate is about four basis points," he said.
He also noted that last year the European Bank for Reconstruction and Development issued floating-rate bonds directly linked to AZIR. According to Kazimov, this serves as even more convincing evidence of trust.
The CBA chairman outlined three main priorities for the regulator. First, strengthening transmission to market rates. Second, deepening capital and money markets by expanding the range of financial instruments based on AZIR, including a yield curve. Third, improving the forecasting system with data analytics and artificial intelligence technologies.
