Security in Azerbaijan to reach 50 percent of GDP by late 2009

Business Materials 15 October 2009 12:55 (UTC +04:00)

Azerbaijan, Baku, October 15 / Trend I. Khalilova /

The Azerbaijani Central Bank forecasts increase of strategic currency reserves up to 50 percent of GDP by late 2009, said on Wednesday, director general of the bank, Khagani Abdullayev, told media at at II International Banking Conference of the Commonwealth of Independent States (CIS) "Enhancing the stability of the financial and banking systems of the Commonwealth. 

Expected level of GDP hit 30 billion manat (about $40 billion) as of 2009. Today, strategic currency reserves hit $18 billion.

"Such solid security provides the country with all sources of liquidity, monetary stability. Therefore, it is the main macro-economic factor. It allowed Azerbaijan to reliably prepare for the global crisis and to avoid its strong influence," Abdullayev said.

Today, Azerbaijani foreign reserves can cover 24-month import. It is a high rate, especially during crisis.

The Central Bank expects for restoration of currency reserves worth $1 billion spent for intervention by late 2009. As of September 30, currency reserves in the Central Bank are $5.1 billion.

"At present, supply fully covers demand on the currency market. We sold much in the first quarter. This index hit $1 one billion. There were no major changes in this volume, but on the contrary, we expect for reduction ofthis sum next months. Everything depends on oil prices on the world markets, the level of payment balance, the total volume of currency market and drawing of foreign borrowings by banks," Abdullayev said.

Depending on the forecast concerning payment balance, there are various scenarios to increase manat intervention in the Central Bank. Buying of dollar from the currency market can reach 50 percent of its sale by the bank in the first quarter. In any case, large sale of foreign currency is not expected by late 2009,director general of the bank said.

TREND and Day.az news agencies provide the banking conference with media support.

On October 14, the official exchange rate is 0,803 manat to $1.

Do you have any feedback? Contact our journalist at: [email protected]