IMF to provide Azerbaijan with technical aid

Business Materials 23 May 2011 16:48 (UTC +04:00)

Azerbaijan, Baku, May 23 / Trend I. Khalilova /

The International Monetary Fund (IMF) has agreed to provide technical assistance to improve the monetary structure and exchange rate policy in Azerbaijan.

"The Central Bank of Azerbaijan has requested technical assistance from the fund to pass to a more flexible exchange rate regime of the national currency," the government said.

The bank controls the country's national currency to avoid the excessive strengthening of the manat rate.

There is an increased dollar supply on the domestic foreign exchange market. This has led to the strengthening of the manat. But the Central Bank keeps the situation under control, preventing the excessive strengthening of national currency.

The volume of the Central Bank's intervention in the foreign exchange market amounted to $156 million during the first quarter of 2011.

According to the CBA representatives, the foreign exchange market acted in a self-regulatory regime.

The bank has implemented its exchange rate policy since early 2011 in the context of expanding supply channels in the currency market and a new operational mechanism.

The average annual change of the nominal exchange rate of manat is projected at 1 percent in the draft long-term economic development strategy.

Strengthening the rate of the manat may slightly prevent the development of non-oil export of the country.

So, today the main challenge facing the vank is to keep inflation at a stable one-digit level.