Ratio of Azerbaijan's strategic currency reserves to GDP nears 70 percent

Business Materials 21 May 2013 14:34 (UTC +04:00)

Azerbaijan, Baku, 20 May / Trend E. Aliyev /

The ratio of strategic currency reserves of Azerbaijan to the country's GDP is nearing 70 per cent, a report on the monetary policy in the first quarter of 2013 of the Central Bank of Azerbaijan (CBA) published on Monday on its website says.

According to the report, in January-March, the country's strategic currency reserves rose by 2.3 per cent, or $1.1 billion compared to the beginning of the year, reaching $47.1 billion which is enough to cover imports of goods and services in three years.

'The high growth rates of strategic currency reserves signify a factor that reduces the sensitivity of the economy to external crisis influences and forms a strong macroeconomic buffer', the report says.

Foreign exchange reserves held by the Central Bank of Azerbaijan grew in the reporting period by 5.5 per cent reaching $12.3 billion which is sufficient to finance the imports of goods and services in a single year.

'During the reporting period, the growth of strategic currency reserves of the country continued and exceeded international sufficiency standards', the report said.

According to the State Customs Committee, in January-March, the country's trade turnover amounted to $8.6 billion of which $6.3 billion fell on exports and $2.2 billion on imports. The surplus of the trade balance in January-March amounted to $4.1 billion.

Exports of cotton fibre, vegetable oils, metal pipes and other products are growing at high rates and 11 per cent of imports fall to foodstuffs. Its volume in the period fell by nine per cent which can be regarded as increase of domestic production, the report said.

"In addition, there is expected to be a greater increase in the level of self-sufficiency for most agricultural commodities and food products by the end of the year. On some of them, melons, vegetables, fruits and berries, the level of self-sufficiency will exceed 100 per cent which means the country will turn into an exporter of the product," CBA reported.

According to the report, along with exports the dynamics of remittances and capital flows from abroad also had an enhancing effect on foreign exchange earnings. According to the State Statistics Committee, the volume of foreign investments in the country's economy in the first quarter totalled $329 million, or 18 per cent more compared to the same period of 2012.

The official exchange rate on May 20 is 0.7847 AZN / USD.