Azerbaijan not to change forecasts on manat rate in 2012
Azerbaijan, Baku, Sept. 16 /Trend, I.Khalilova/
In 2012, the government of Azerbaijan plans to keep unchanged the forecast of the rate of national currency in relevant to the U.S. dollar - at 0.79 manat, a governmental source told Trend. These forecasts have been stipulated in the draft state budget for the next year, exactly in the macroeconomic forecasts.
Despite that the forecast for 2011 was set at 0.79 manat, the exchange rate in May was below this figure. The national currency strengthened during the year, but with slow rates since September last year. The rate of manat in relevant to the U.S. currency strengthened by 2.09 percent during the year. In 2011, the dollar dropped by 1.4 percent.
On the one hand, the strengthening of manat is a factor containing inflation. On the other hand, some serious process take place on a global scale - until last week there was a serious depreciation of the dollar in relevant to leading world currencies.
Both this and next year, Azerbaijan expects flow of sufficiently large amounts of petrodollars, which are incorporated in the consolidated budget revenues. Also huge investments are expected to be made in Azerbaijan's economy from abroad.
In any case, the Central Bank of Azerbaijan (CBA) controls the rate of national currency in order to avoid excessive rise or drop of manat rate.
While conducing exchange rate policy, the CBA pays proper attention to the inflation process and the competitiveness of the country.
Meanwhile, CBA completely abandoned the use of dual currency (U.S. dollar-euro) basket while determining the exchange rate of manat. It moved to bilateral (manat-U.S. dollar) exchange rate from Jan. 10, 2011.
The CBA has realized the transition to maintain the value of manat by introducing the mechanism of two-currency basket comprising the U.S. dollar and euro since March 11, 2008.
Macroeconomic analyses demonstrate that USD-manat bilateral exchange rate target is in better harmony with the goals of Central Bank, particularly the target to affect inflation level under the current environment. This mechanism, along with being favorable from communication point of view, amplifies opportunities of the Central Bank to switch to floating exchange rate regime in a long run.
Many countries are now starting to actively stimulate export and economic growth by reducing the value of the national currency. However, the CBA considers it incorrect to link these measures with the exchange rate policy. It is possible to contribute to these processes through the exchange rate policy, with the policy pursued by the CBA in accordance with the structure of the economy, as it aims to expand exports and economic growth.