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Moody's on Friday affirmed Azerbaijan's issuer and foreign currency senior unsecured ratings at Ba1 and changed the outlook to positive from stable.

The agency states that issues around corruption and voice and accountability continue to characterize Azerbaijan's sociopolitical environment.

"We expect geopolitical relations with Armenia to remain tumultuous, despite ongoing engagements in peace talks. Unless there is greater economic integration or a common geopolitical interest between the two countries, Moody's expects geopolitical tensions to remain elevated. Both sides have continued to build up military capabilities while occasional cross-border firings continue to occur, signifying that the potential for another escalation in military conflict between the two countries remains," Moody's said.