Azerbaijan, Baku, 24 January /corr. Trend I.Khalilova / The decreasing rates of strengthening the national currency of Azerbaijan in relation to the USD in January, which is a seasonal factor, caused an increase in the demand for foreign currency in the internal market, the Head of the Department of Statistics and Studies of the National Bank of Azerbaijan (NBA), Emin Huseynov, reported to Trend .
To balance the demand and proposals, the NBA will hold operations in the internal currency market. Increase in the demand for the USD is a traditional tendency and may continue during the first quarter because it usually takes place at the beginning of each year.
"Last year's tendencies have shown an increase of the proposals of the foreign currency. In order for the AZN not to rise too much, the National Bank should sterilize the surplus dollar," Huseynov said. Otherwise, the macroeconomic and financial stability in the country may be broken and the competitiveness may significantly drop within a short period.
In the global sense, not only AZN/USD exchange rate, but also the nominal effective rate is important, which demonstrates mutual relations of AZN with the currencies of the key external trade partners of Azerbaijan because the trade operations are being made not only in USD, but also in EUR pound sterling. Since the beginning of the year, the nominal effective rate rose by 1.4% and it means an insignificant reduction of prices for the imported commodities due to the dynamic of the exchange rate.
The world processes - fall of the stock indexes, rose of the USD, oil price decrease - also affect the exchange rate. The key reasons for the fall of the indexes are the decrease of rates of the economic growth and the expected fall in the USA and European countries. However, the recent statement by the US President regarding additional measures to stimulate the economy was kindly accepted by the world market and brought to rise in the USD. As the dollar is the key world currency and the oil price a key indicator of the demand, there is negative inter-relation between the USD and oil prices. However, the decision of the Federal Reserve System to decrease the interest rates will lead to a further rise of the USD. In addition, the cheap dollar has a favorable impact on the US export. Therefore, Huseynov considers that the recent strengthening of the USD will not be for long.