Fitch: Azerbaijan has high financial flexibility

Although Azerbaijan possesses very high financial flexibility and a significantly improved regulatory and legal framework, certain work still needs to be done in this area, Arvind Ramakrishnan, director of EMEA Sovereign Ratings at Fitch, said during the webinar "Fitch on the Caucasus: Sovereign and Banking Sector Perspectives for 2026," Report informs.

He noted that some mandates remain unclear, particularly regarding the division of roles between the State Oil Fund of Azerbaijan (SOFAZ) and the Central Bank of Azerbaijan (CBA). In this regard, Fitch downgraded Azerbaijan's sovereign rating by one notch in the macroeconomic block, balancing it against two positive notches in public finance and external finance.

Ramakrishnan also emphasized that the extremely low level of public debt is a clear advantage for the country's sovereign rating.

"The economy is advancing along the path of diversification, but much work still lies ahead. As for the quality of public governance, it undoubtedly remains weaker compared to peer countries in the 'BBB' category, although improvements have been recorded in this area over the past few years," he added.