The transition in global monetary policy over the last few months represents one of the most significant pivots in recent economic history. As 2025 drew to a close and the early weeks of 2026 unfolded, a sense of cautious optimism permeated international markets. The prevailing narrative suggested that the aggressive cycle of monetary tightening, which had characterized the post-pandemic recovery years, had finally done its work. Central banks across the globe, including the European Central Bank and authorities in emerging markets like Brazil and Kazakhstan, began to lower their benchmark interest rates to stimulate growth.

In the South Caucasus, the Central Bank of Azerbaijan followed this global momentum with a notable policy shift. After a prolonged period of maintaining a restrictive stance to combat regional price pressures, the Azerbaijani regulator began a series of interest rate cuts starting from the final quarter of 2025. This move was widely interpreted as a signal that the domestic economy was entering a new phase of stability and growth. At that moment, the consensus among analysts was clear: 2026 would be the year of cheap money, with further reductions expected to ease the financial burden on businesses and consumers alike.

However, the geopolitical landscape soon shattered these........

© AzerNews