Azerbaijani manat: stable, expensive and other facts you need to know

Baku, Azerbaijan, March 20

By Tim Tal - Trend:

Ten years after the Azerbaijani manat became the single legal tender across the country, the currency has become stronger, and more stable. And it seems like it will remain this way for some time. To know how one thing led to another, we have to go a few pages back.

After the collapse of the Soviet Union, Azerbaijan gained its independence in 1991, for the second time in the 20th century.

At the extraordinary meeting called under the people's will on June 30, 1991, the Supreme Council of the Azerbaijani Republic adopted a declaration about restoration of Azerbaijan's state independence. Since then, the country marks October 18 as the State Independence Day.

The establishment of independent Azerbaijan of course triggered the need for the founding of the National Bank, and the national currency, the manat.

Replacing the Russian rouble, the manat was put into circulation by presidential decree on 15 July, 1992.

The first monetary emission of the Republic of Azerbaijan was printed in 1992 by the Central Bank of France. The banknotes of 1, 10, and 250 manat were put into circulation in August 1992, while coins of 5, 10, 20 and 50 gapik (1 manat = 100 qapiks) in November, banknotes of 5 manat in December, banknotes of 50, 100, 500 and 1000 manat in March of 1993 .

From August 1992 through January 1994 manat was in parallel circulation with rouble. Later however, the National Bank of Azerbaijan implemented an independent monetary policy and manat became the single legal tender across the country.

To regulate cash circulation in the country and optimize demand for cash the National Bank put into circulation banknotes of 10,000 manat in 1994, and 50,000 manat face value in 1996.

Fast forward to 2005, when Azerbaijan's president signed the decree "on Changes to the Nominal Value of Monetary Units and the Scale of Prices (Denomination)."

According to the decree, from 1 January, 2006 due to transition to the new manat (AZN), 1 new manat equaled to 5,000 old manats (AZM). Later, the new banknotes of 1, 5, 10, 20, 50, 100 and metal coins of 1, 3, 5, 10, 20 and 50 gapik were put into circulation.

Azerbaijan's new manat turned out to be more stable compared to the one before denomination. It was also getting more expensive. Below are some statistics from Azerbaijan's Central Bank of how Azerbaijan's new manat was changing compared to the U.S. dollar, Euro and Russian rouble.

As the statistics above show, since the 2006 denomination, AZN was getting stronger, most noticeably towards the U.S. dollar. It should also be noted that the foreign currency rate in Azerbaijan is regulated by the country's Central Bank.

Azerbaijani manat is frequently mentioned among the most expensive currencies in the world, and it is the most stable and expensive in the South Caucasus region as well, compared to Armenian dram and Georgian lari.

1 USD - 0.7843 Azerbaijani manat
1 USD - 415.21 Armenian dram
1 USD - 1.7274 Georgian Lari
*rates for March 18

Azerbaijan's manat was able to withstand the economic crisis, compared to currencies in other countries, such as Turkey, Belarus, Kazakhstan and Armenia. As for the Russian rouble, Azerbaijan's Central Bank believes the cheapening of the rouble will not affect the stability of the national currency of Azerbaijan. Thus far, it hasn't.

Speaking of the euro currency fluctuations, the Central Bank believes that these fluctuations will not affect the country's import and export because the official AZN/EUR exchange rate is determined by "crossing" the AZN/USD (regulated by the Central Bank) and USD/EUR exchange rates.

Currently, Azerbaijan's Central Bank maintains the price of manat, and no major changes to the currency are expected. In 2013, Head of the country's Central Bank, Elman Rustamov said that there is no need for Azerbaijan to create a 3-manat banknote. At the same time, Rustamov's first deputy Alim Guliyev said that the release of 200-manat and 500-manat banknotes, for the short term, is not on agenda of the Central Bank.

Rustamov also said at the time that the Central Bank doesn't exclude the release of a 1-manat coin (which do not exist thus far), if there is a necessity. Speaking about the news of the change of manat's design, he said those were "rumors", and so far there are no such plans.

So, the least you need to know about Azerbaijan's manat:

1. The banknotes were designed by Robert Kalina, who also designed the current banknotes of the euro and the Syrian Pound.

2. Azerbaijani manat is considered to be among the most expensive currencies in the world, and is the most expensive one in the South Caucasus region.

3. Manat is stable, and is being regulated by the Central Bank of Azerbaijan.

4. So far there are no plans to change the design of manat, as well as release new 1-manat coins, 3-manat, 200-manat, or 500-manat banknotes.

5. The denomination of manat happened in 2006, after which the new currency has strengthened, compared to the U.S. dollar and Russian rouble.