10:55 - 30.07.2026

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July 30, Fineko/abc.az. "The Central Bank does not regulate interest rates by administrative methods. Loan rates should be formed independently, they should be determined by the market. We influence the cost of money, and when we reduce interest rates through our discount rate, the cost of the manat, that is, the expenses of banks, also decreases. This, in turn, affects the overall level of loan rates," Central Bank of Azerbaijan’s chairman Taleh Kazimov said in an interview with Azerbaijani state TV & news agency APA.

Kazimov noted that banks attract funds from the public or business entities at a certain interest rate.

"Currently, this rate is around 9% on average. The bank then adds operational costs to the value of these funds, as there are maintenance expenses. Additionally, there is a credit risk interest rate. Credit risk refers to the probability that a borrower will not repay a loan, taking into account their financial situation. In addition, the bank adds its own margin. Considering that the cost of our financial resources is already at 9% today, adding all these percentages increases the credit rates to double digits.

Our analysis shows that a change in credit rates of 1-2%, or even 3-4%, whether it is an increase or decrease, does not significantly impact the restriction of lending or its rapid acceleration. For example, in July 2025, if I'm not mistaken, credit rates increased to 19% due to the rising cost of resources. However, in the same year, the loan portfolio for small and medium-sized businesses increased by 18%. Logically, the opposite should have occurred: as interest rates rise, lending rates should decrease. A 5-10% change would undoubtedly have an impact, but the fluctuations observed over the past two years have not had such a significant effect."

The CBA chairman added that he does not observe a significant jump in interest rates, in particular in the field of consumer and business lending: "First, today one of the main challenges for us in the banking sector is high concentration, and I would feel more comfortable if the competition in the sector was higher. We need to strengthen competition. There are dominant banks in the market, and changes in their interest rates affect the entire sector."