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.
