BAKU, Azerbaijan, January 31. The
Netherlands-based ING Group expects the Central Bank of the
Republic of Azerbaijan to leave the policy rate unchanged at 6.75%
at the 4 February meeting, Trend reports via the ING.
“Azerbaijan’s trade surplus continues to narrow – falling below
$1bn for the full‑year 2025 – while softer oil price expectations
point to lingering risks of a negative current account in 2026.
However, the likelihood of this triggering pressure on the manat's
1.70/USD peg has diminished. A stronger-than-expected 2.6% GDP
consolidated budget surplus last year boosted liquid assets at
SOFAZ and the central bank to roughly 110% of GDP, giving
policymakers ample capacity to defend the currency if needed.
Meanwhile, the recent appreciation of floating regional currencies
– including the Kazakhstani tenge and Uzbekistani soum – makes the
pegged manat less of an outlier, easing relative pressure,” reads
the latest report released by ING.
On the rates side, the ING analysts note that the
forward-looking indicators paint a relatively dovish picture.
“Slower-than-expected 1.4% GDP growth in 2025, easing inflation
at 5.2-5.3% YoY, and a declining FX share in bank deposits all
support the case for eventual monetary easing. Still, caution is
warranted; the consolidated fiscal balance excluding SOFAZ fuel
revenues widened to 11% of GDP last year due to higher spending,
while the external trade balance deteriorated as imports outpaced
exports. These trends argue for maintaining the current stance in
the near term, with any cuts contingent on firmer evidence of
sustained disinflation and improved fiscal discipline,” the report
says.
