BAKU, Azerbaijan, July 27. Actions of the Central Bank of Azerbaijan (CBA) to manage excess domestic liquidity are positive, Trend reports via Fitch Ratings statement on the country's upgraded credit rating.
"The CBA uses the exchange rate as an intermediate operational target and has improved its capabilities in managing excess domestic liquidity and increasing the key interest rate since 2022," Fitch analysts noted.
The rating agency highlighted the halving of the dollarization level in Azerbaijan over the past 10 years among positive trends.
"The financial dollarization is still high enough—40 percent in May 2024—but this is about half compared to the peak dollarization level of 81.6 percent at the end of 2015," Fitch said.
The rating agency recommends the CBA to develop capital markets in Azerbaijan.
Fitch also expects clarification of the mandates of the CBA and the State Oil Fund of Azerbaijan regarding the frameworks for exchange rate operations.