Azerbaijan, Baku, Feb. 27 / Trend , N. Ismayilova/ The National Bank of Azerbaijan (NBA) says money emission is indispensable to support high business activity in the country, NBA Board of Directors Chairman Elman Rustamov said on Feb. 27.
"The money emission will contribute to the business activity on the backdrop of reducing inflation," Rustamov said.
The Monetary Committee currently mulls over the mechanism and volume of bank notes emission.
Azerbaijani high- liquidity banks will spend roughly $1.5 billion to pay out their foreign liabilities which necessitates new money emission. They paid off about $1.1 billion in foreign loans by January.
The NBA's head said such sum of money, taken out of the circulation, will negatively affect the real sector. Moreover, the money in circulation has reduced since early 2009.
"15-perent-reduction in the money circulation in January-February is a seasonal process. This figure was 10 percent in the same period of 2008," Rustamov said.
The money circulation volume began to rise in March 2008 which is expected to be repeated in March 2009, Rustamov said.
Some corrections will be made to new notes as the National Bank of Azerbaijan will be renamed as Azerbaycan Merkezi Banki (Central Bank). New notes will be used simultaneously with the current ones until their term of circulation expires.
Circulation term of notes is 3 to years and coins - 20 years. One and five-manat banknotes are widely used. Their circulation term is 1.5-2 years. We will issue money to prevent them from deforming. The NBA even considered possibility of replacing them with metallic notes which will be steadier.
As a result of denomination by the NBA, old banknotes were fully replaced by Dec. 31, 2006. Only new banknotes were used from Jan. 1, 2007, which prevented difficulties for businesses as 19 notes were put into circulation at the same time.
Issue order worth 1.7 billion manat including three-year reserves were placed. Banknotes account for 94 percent (one, five, 10, 20, 50 and 200 manat) and coins (one, three, five, 10, 20 and 50 qapik) for 6 percent of the emission.
On Feb. 27, the official exchange rate is 0.8052 manat to $1.
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