Expected default in U.S. no risk for manat rate
Azerbaijan, Baku, July 26 / Trend I.Khalilova/
The Azerbaijani Central Bank (CBA) will try to prevent the sharp consolidation of the manat to ensure the international competitiveness of the country's economy.
The global community is concerned that the U.S. can declare a default in August due to the country's external debt.
U.S. Finance Minister Tim Geithner said that the U.S. will announce default on August 2 due to the fact that Republicans do not want to increase the rate of the national debt. As a result, the situation
emerged in the economy may lead to depression like in 1930s and the crises of the world scale.
"The CBA will conduct a policy of maintaining a stable exchange rate of manat due to the CBA's priorities on inflation and financial stability for 2011," the CBA said. "The work will be conducted to
create a balance between supply and demand to achieve these goals in the currency market of the country, if necessary."
As of 2009, the national currency of Azerbaijan consolidated by 1.8 percent, by 0.6 percent in 2010 and by 1.4 percent since early 2011.
"The situation with the strengthening of manat will depend on the payments balance, but in any case, the CBA will not allow the strong strengthening," Director General of the Central Bank of Azerbaijan (CBA) Khagani Abdullayev said earlier. "Thus, if a surplus of the payments balance was at $ 15 billion in 2010, the minimum forecast is $13-$14 billion in 2011. But, the figure may exceed $15 billion."
He said the CBA has always focused on the real effective exchange rate, which is defined by two parameters - the inflation in Azerbaijan and inflation in trade partners.
"A normal macroeconomic framework, to which we go, is the ratio of broad money (M2) to inflation in the same interval as in 2010. Money supply growth is expected to reach 30-35 percent, and forecast of the average annual inflation rate ranges between 7 - 8 percent," he said.
The CBA, leading payment balance statistics, stated the 47.8-percent growth in the current account surplus in the payments balance in annualized calculation. Thus, the current account surplus for 2010 totaled $ 15 billion compared to $10.2 billion a year earlier. At the time, the current account surplus of oil and gas sector amounted to $19.9 billion, which completely covers the deficit in non-oil sector at $4.8 billion.