BAKU, Azerbaijan, November 22. There is a decline in oil prices on the world market, member of Azerbaijan's Milli Majlis (Parliament) Committee on Economic Policy, Industry and Entrepreneurship Vugar Bayramov said, Trend reports.
"Oil prices decreased by 16 percent after September. The world market price of oil is important in terms of Azerbaijan's state revenues. Currently, about 80 percent of Azerbaijan's exports are oil products. In this context, the oil price has a direct impact on the amount of foreign currency entering the country," he said.
Bayramov noted that the OPEC+ alliance is expected to meet on November 26. News about possible revision and increase in oil production at this event affects the energy market, investors' decisions and oil price.
"Currently, a significant part of Azerbaijan's foreign exchange demand is paid by the State Oil Fund, which has the ability to transfer an average of 12 billion manat ($7 billion) annually from existing assets. In addition, the oil price has both economic and psychological impact on the currency market," he emphasized.
Bayramov also mentioned that despite the fact that the current price of Brent oil does not yet pose a threat to the equilibrium in the currency market, however, a possible change in the cost of "black gold" in the next period may have certain consequences.
"Nevertheless, Azerbaijan has not yet introduced a floating exchange rate regime. The Central Bank retains the possibility of direct intervention in the process. Therefore, how the manat rate will change against the background of changes in the oil market will directly depend on the position of the Central Bank of Azerbaijan," he added.
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