BAKU, Azerbaijan, November 19. Stability in the currency market is expected to continue from the end of 2025, with the exchange rate projected to settle around 6 percent based on economic fundamentals, Governor of the Central Bank of Azerbaijan (CBA), Taleh Kazimov, said during today’s plenary session of the parliament, Trend reports.
Speaking at a discussion on the draft law “On the State Budget of the Republic of Azerbaijan for 2026,” Kazimov noted that trends affecting the currency market in both oil and non-oil segments have been balanced, supporting overall exchange rate and price stability.
"The current account surplus and effective management of economic expectations are key factors reinforcing equilibrium in the currency market. Reforms implemented since 2022 to strengthen the transmission mechanism of the Central Bank have contributed to a reduction in dollarization in the economy.
As a result, dollarization in residents’ foreign exchange transactions has fallen sharply compared to the same period last year, reaching 28.5 percent, the lowest level in history. This trend reflects both stable economic expectations and growing confidence in the manat,” Kazimov said.
He mentioned that, for the first time, the interbank liquidity index has started to fall in line with the CBA’s interest rate corridor. The European Bank for Reconstruction and Development’s (EBRD) launch of bonds linked to the national currency index, including the successful placement of a 50 million manat bond through public offering, confirms the index as a reliable reference rate.
Kazimov also highlighted the banking sector’s stability over the past three years. Capital adequacy stands at 11.7 percent, liquidity at 160 percent, and return on equity at 18.5 percent, reflecting resilience to risks and robust support for the real sector.
Over the first ten months of the year, the banking sector’s loan portfolio expanded by 4 billion manats, growing 1.9 percent, with business loans accounting for over 50 percent of total credits. The sector’s lending capacity is estimated at 20.8 billion manat ($12.2 billion), ensuring broad access to financial resources for the real economy.
Positive trends are also observed in household deposits, which increased by 6 percent to 49.2 billion manat ($28.9 billion). Deposits represent 73.3 percent of total savings, including 15.5 billion manat ($9.12 billion) in household savings. Foreign currency deposits grew by 8.7 percent, and term deposits rose by 15.6 percent, showing an average annual growth of 20 percent over the last three years.
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