Maintaining the de facto peg of the Azerbaijani manat to the US dollar continues to be a key priority in Azerbaijan’s foreign exchange policy, despite plans to increase exchange rate flexibility in the medium term, Trend reports.
Fitch analysts note that the Central Bank of Azerbaijan is actively developing tools to manage structural excess liquidity in the banking system and to improve the efficiency of monetary policy transmission.
However, the agency points out that monetary policy transmission to the broader economy remains limited. Challenges include the underdevelopment of domestic money markets, persistent excess liquidity in the banking sector, and a high degree of dollarization. As of April 2025, about 40% of deposits are still held in foreign currency, although this figure is gradually declining.
Source: en.trend.az
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