BAKU, Azerbaijan, November 4. Azerbaijan's banking system currently has the capacity to extend an additional 4.6 billion manat ($2.7 billion) in loans without breaching existing regulatory requirements, the governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov said.
He made the remarks during a meeting of the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship dedicated to discussing the draft state budget for 2027.
According to him, monetary policy will also remain focused on keeping inflation within the target range through monetary conditions next year. Twelve-month inflation stood at 5.5% in September 2026, while annual core inflation reached 4.9%.
Assessments show that inflation in Azerbaijan over the past year was driven upward primarily by inflation in its trading partner countries.
During the first ten months of 2026, exchange rate stability was maintained amid a significant excess of foreign currency supply over demand in the market. The Central Bank made substantial foreign currency purchases, while its foreign exchange reserves increased by $3.9 billion, or 34%, over the ten-month period, reaching $15.4 billion. This is the highest level in Azerbaijan's history as an independent state.
Kazimov emphasized that confidence in the national currency continues to grow.
"Over the past year, the dollarization of deposits held by resident individuals decreased by 3.3 percentage points to 25.7%, while the corresponding figure for non-resident individuals fell by 5.7 percentage points to 54.6%," he said.
This year, monetary sector indicators have been shaped by excess liquidity. The banking sector's structural liquidity surplus, excluding required reserves, reached 6.4 billion manat ($3.7 billion) in October, increasing 2.2 times compared to the end of last year.
Against this backdrop, average interest rates on unsecured transactions in the interbank money market remained within the interest rate corridor.
