BAKU, Azerbaijan, July 31.The Azerbaijani banking sector's structural liquidity surplus, excluding required reserves, reached 6 billion manats ($3.53 billion) at the end of the first half of 2026, more than doubling from the end of December, the Central Bank of Azerbaijan (CBA) said.
The structural liquidity surplus, defined as the difference between the Central Bank's liabilities to the banking system and its claims on banks, increased 2.1 times compared with December 2025, according to the CBA.
The Central Bank said it continues to apply monetary policy instruments in line with developments in financial markets and banking system liquidity. Short-term unsecured money market rates remain within the Central Bank's interest rate corridor.
The average daily AZIR rate stood at 6.43% in May and June 2026 and at 6.39% during the period elapsed in July.
The CBA said the banking sector's high level of structural liquidity surplus indicates that banks have substantial lending capacity.
To manage liquidity, the Central Bank primarily uses seven-day deposit operations, which accounted for 84.3% of its open market sterilization portfolio at the end of June. The regulator also continues to hold regular auctions of its notes.
Over the past three months, yields on Central Bank notes across all maturities, as well as the medium- and long-term segments of the yield curve, have declined.
Interest rates on newly attracted manat-denominated term deposits also fell in June 2026 compared with July 2025, when the Central Bank lowered its key policy rate, the statement said.
