BAKU, Azerbaijan, September
23.The supply in the foreign exchange market has
significantly exceeded demand in Azerbaijan during the past period
of 2026.


This was reported in a statement by the Central Bank of
Azerbaijan (CBA).


According to the statement, the mentioned dominance of supply
was reflected in both the cash and non-cash segments.


“In the first eight months of 2026, foreign currency purchases
from customers by exchange offices exceeded sales by $673 million.
The dollarization level of deposits held by resident individuals
decreased by 3.7 percentage points over the past 12 months to 25.8%
in July 2026.


Amid a sharp decline in demand and an increase in supply in the
foreign exchange market, the CBA carried out foreign currency
purchases. Over eight months, the CBA’s foreign exchange reserves
increased by 32.9% to $15.3 billion. This is the highest level ever
recorded for the CBA’s foreign exchange reserves.







External sector indicators remain favorable. According to
customs statistics, a positive balance of $10.4 billion was
recorded in the country’s foreign trade from January through August
2026. Preliminary data show that the balance of remittances (the
difference between inflows and outflows) amounted to $751 million
from January through August, up 74.1% from the same period last
year. Given the rise in global energy prices this year, as well as
the continued positive trends in exports of non-oil and gas goods
and services, the CBA’s forecast for the current account surplus by
the end of 2026 is likely to be revised upward,” the statement
said.


Furthermore, according to the data, the sector's structural
liquidity surplus—calculated as the difference between the CBA's
liabilities to the banking system and its claims on banks,
excluding funds held as mandatory reserves—reached 6.3 billion
manat ($3.7 billion) by the end of August, a 2.2-fold increase
compared to December of the previous year. Under these conditions,
benchmark interest rates in the unsecured money market showed a
slight downward trend.


"The average daily AZIR rate stood at 6.39% in July, 6.28% in
August, and 6.02% during the elapsed period of September. Monetary
policy instruments are implemented with due regard for processes in
financial markets and liquidity indicators within the banking
system. The CBA primarily utilizes 7-day deposit operations for
liquidity management; by the end of August, these operations
accounted for 70.8% of the sterilization portfolio structure
related to open market operations. Additionally, the volume of the
CBA's note portfolio increased more than fourfold by the end of
August compared to the end of the previous year,” added the
statement.