ING predicts stability in Azerbaijan’s interest rate amid mixed economic signals

As Azerbaijan’s Central Bank prepares for its next policy meeting on September 10, international eyes are watching closely. Among them is ING Group, the Netherlands’ largest banking institution, which expects the Bank to hold its refinancing rate steady at 7%.

Azernews reports that this forecast comes as inflation in Azerbaijan shows signs of cooling. Since the last rate decision in July, the annual consumer price index has eased to 4.9%—comfortably within the Central Bank’s target range of 4±2% by year-end.

But not all indicators are reassuring. ING’s report highlights sluggish economic growth, with GDP rising just 0.9% over the first seven months of 2025. July alone saw a 2.3% contraction. Producer prices are also rising more slowly, suggesting weaker demand across key sectors.

Despite these headwinds, ING cautions against expecting a rate cut just yet. The country’s trade surplus is narrowing, and bank lending continues to grow faster than available funding—factors that may require the Central Bank to keep interest rates high to prevent overheating.

Back in July, the Central Bank trimmed its refinancing rate by 0.25 percentage points, bringing it down from 7.25% to 7%. It also adjusted the interest rate corridor: the lower bound was reduced to 6%, and the upper bound to 8%.