Azerbaijan, Baku, Aug. 12 / Trend A.Akhundov /
To prevent significant strengthening of manat and thereby neutralize the negative impact on the competitiveness of non-oil sector in the first half of 2013, the Central Bank of Azerbaijan (CBA) conducted sterilization of currency in the amount of $1.209 billion, according to a report of the Central Bank of Azerbaijan on monetary policy in the first six months.
"This year, CBA continued its exchange rate policy in the framework of bilateral targeting of the dollar/manat. Under the conditions of large surplus in the country's balance of payments, the offer in the currency market exceeded the demand," the report said.
In January-June 2013, exchange rate of the manat against the U.S. dollar has not changed, and has appreciated by 0.06 percent. Standard deviation was also low (0.0001). The stability of the national currency had a positive impact on the environment and sustainability of the financial sector. During the reporting period, manat has appreciated in both nominal and real terms in relation to the currencies of the U.S., UK, Turkey, Russia, Ukraine, Japan and South Korea.
In January-June, the nominal effective exchange rate (NER) of manat on non-oil sector in the total turnover rose by 2.6 percent. According to the model estimates, the strengthening of NER by one percent leads to lowering of prices by 0.28 percent. The real effective exchange rate of the non-oil sector has strengthened during the reporting period by 1.5 percent.
"Thus, during the reporting period, the Central Bank has ensured stability of bilateral exchange rate of manat and the dollar. Multilateral same rate of manat rose, which is a positive development from the point of view of achieving the inflation objectives," according to the report.