The Central Bank of Azerbaijan was involved in something that is quite uncommon for the monetary authority of an emerging economy in the first six months of 2026, buying dollars that were not needed in order to avoid the strengthening of a certain currency. This is due to the fact that there is a structural oversupply of foreign exchange resulting from an increasingly larger current account surplus and an increasing move of residents from holding their money in dollars.

In April 2026, a substantial single-month purchase by CBA amounted to $1.0 billion, marking the largest transaction in the first half of the year. This was followed by a more moderate intervention in June 2026, with purchases totaling $394 million as the surplus continued to persist. Year-to-date, reserve growth has reached $1.64 billion since January 1, 2026, while the USD/AZN exchange rate has remained stable at 1.7000, unchanged since April 2017, for a duration of nine years.

The Central Bank acquired dollars worth $394 million just in June, a lower value than $1 billion in April, but still indicating consistent pressure on the currency. At the beginning of February 2026, the foreign exchange reserve position of the CBA was estimated to be at about $11.6 billion, a value that increased by an additional $1.64 billion during the first half of the year because of dollar purchases and profits gained from investments in the current foreign exchange reserves. SOFAZ, the sovereign wealth fund that oversees........

© AzerNews