The yield curve in Azerbaijan's financial markets has experienced a decline, reflecting recent adjustments in monetary policy instruments. According to the Central Bank of Azerbaijan (CBA), these measures are being implemented in accordance with ongoing market processes and the overall liquidity position of the banking system.
Operative Information Center-OMM reports, citing the Central Bank of Azerbaijan, that interest rates in the unsecured money market continue to fluctuate within the CBA's established interest rate corridor, remaining close to the refinancing rate.
The recent decision to lower the parameters of the interest rate corridor was accompanied by a decrease in the AZIR (Azerbaijan Interbank Rate). Specifically, the average daily level of the AZIR index dropped from 6.7% in January 2026 to 6.54% in February, reaching 6.47% in March. Since the previous policy meeting, yields on CBA notes and the broader yield curve have also trended downward. The CBA has primarily utilized one-week open market operations to minimize the impact of non-monetary factors on the AZIR index.
The Central Bank of Azerbaijan plays a pivotal role in maintaining macroeconomic stability in Azerbaijan by regulating the money supply and ensuring the resilience of the national currency, the Manat. By managing the interest rate corridor and utilizing tools like the AZIR index, the CBA aims to foster a predictable inflationary environment and support sustainable economic growth within the country's financial sector.
