Central Bank of Azerbaijan buys foreign currency, manages liquidity and interest rates

The Central Bank of Azerbaijan has been purchasing foreign currency this year, causing foreign exchange reserves to reach a historic high, the Central Bank stated in response to an inquiry. This buying increases manat liquidity in the banking system, which the Central Bank manages to minimize sharp interest rate fluctuations in the interbank money market. The Central Bank also noted that the country's foreign currency position is strong, supported by a positive goods trade balance of approximately $9.45 billion in the first half of 2026. The Central Bank has been using its available instruments to achieve its monetary policy objectives.

The accumulation of foreign reserves strengthens Azerbaijan's resilience to external economic shocks and supports long-term exchange rate stability. The Central Bank monitors global economic factors, such as the global dollar surge, while balancing domestic inflation dynamics against its monetary policy targets. The Central Bank has been actively managing the balance between foreign currency inflows and domestic financial market health.