EBRD: Azerbaijan's transition to new AZIR model reinforcing its continuous use as benchmark rate

Introduction of the new methodology reflects the CBAR's (Central Bank of Azerbaijan) determination in market development and marks a milestone in the modernization of Azerbaijan's financial markets, said Nataly Mouravidze, the EBRD's Head of Azerbaijan, Olaylar informs.

"With the new methodology, the CBAR aims to eliminate breaks in AZIR's publication, reinforcing its continuous use as a benchmark rate and fostering deeper integration into other segments of Azerbaijani manat markets. The new methodology introduces additional indices, i.e., compounded AZIR rates over 30, 90, and 180 days, and AZIR Compounded Index, with an aim to facilitate the market's use of the AZIR index in cash and derivatives products," she noted.

The Central Bank of the Azerbaijan Republic (CBAR), with technical support from the European Bank for Reconstruction and Development (EBRD) Treasury, has introduced a refined methodology for the calculation and publication of the Azerbaijan Interbank Rate (AZIR).

The new methodology ensures the daily publication and the reliability of the benchmark rate, fostering the development of Azerbaijani manat markets and contributing to the resilience of Azerbaijan's financial sector, as well as the country's overall macroeconomic resilience.

The development builds on the momentum of the series of CBAR reforms. Recently, the CBAR has successfully stimulated trading activity on the interbank market and laid the foundation for further development.

On May 15, 2025, the CBAR revealed the reformed AZIR, newly established compounded AZIR rates and the AZIR Compounded Index on its official website.

Since its introduction on May 1, 2023, the AZIR has become a pivotal indicator for monitoring monetary policy transmission.

Since November 2023, CBAR has been actively managing the AZIR index within a predefined interest rate corridor, highlighting the strengthened role of the interest rate channel in its monetary policy.

The EBRD is a leading institutional investor in Azerbaijan, having invested around €4 billion in almost 200 projects across various sectors of the economy.