Baku: The Central Bank of Azerbaijan is poised to sustain its cautious monetary policy through 2026, ensuring the manat exchange rate remains stable, as reported by APA-Economics. This strategy was highlighted in a forecast released by Fitch Solutions regarding Azerbaijan's economic outlook.

According to Azeri-Press News Agency, the assessment from Fitch Solutions projects that inflation will decline to 5.0% by the end of 2026, a decrease from the 5.6% recorded in 2025, aligning with the Central Bank's target range of 2-6%. Despite this positive outlook, the report cautions that inflation risks persist due to geopolitical tensions and supply chain disruptions, particularly the sanctions on Russia affecting food exports. Azerbaijan imports a significant portion of its grain, dairy products, and meat from Russia, making it vulnerable to rising transportation and operating costs.

Fitch Solutions suggests that in response to these conditions, the Central Bank will maintain a cautious approach, gradually reducing the interest rate from the current 6.50% to 6.00% by the end of 2026. Additionally, the report underscores that the exchange rate policy will remain tightly managed, with the manat expected to be upheld at 1.70 AZN against the U.S. dollar, reflecting the government's commitment to long-term currency stability.