Ruble devaluation will not affect national currency stability in Azerbaijan
Baku, Azerbaijan, March 14
By Emin Aliyev - Trend:
Cheapening of the Russian rouble will not affect the stability of Azerbaijan`s national currency the Central Bank of the country told Trend on March 14.
"It should be noted that the financial and economic potential of Azerbaijan makes the maintenance of the national currency possible and rational. Therefore, devaluation will not affect the rate of the manat to the U.S. dollar. The stability of the manat rate is determined by the fundamental factors that also proved itself during the global financial crisis," the CBA said.
The official dollar rate in Russia reached a historic maximum on March 14. The Central Bank of the Russian Federation has established its rate at 36.6391 roubles per dollar, the first-ever exceeding the threshold of 36.6 roubles per dollar. The previous record figure was fixed at 36, 4865 RUB / USD on March 13. Since the beginning of the year the official exchange rate has increased by 12.2 percent and daily foreign exchange intervention carried out by the Russian Central Bank for the maintenance of the national currency made up to $400 million.
"Since the beginning of this year the rouble depreciated against dollar and euro and this trend reached record levels in 2009. Apart from everything else, this process also leads to the reduction of the rouble cost against manatm, which reached nine percent since the beginning of the year. Theoretically, this could have some impact on the country`s economy, or more precisely on the import and export of products," the CBA said.
Since the beginning of the year, the official exchange rate of Russian rouble in Azerbaijan decreased from 0.0236 to 0. 0214 AZN / RUB (as of March 14).
The Central Bank said the impact this process has on the national economy depends on how long the cheapening would continue.
"Studies show that importers and exporters react to changes in rates after a certain time and if these changes are small or short term in nature, then the market will react to it insignificantly, or would not react at all.
"World experience shows that nominal devaluation provides temporary superiority prices, while constant price leading is determined through real exchange rate taking into account inflation as well. If the Russian producers` dependence on imports is high, then the devaluation would increase the real exchange rate and that would not provide them with competitive price superiority. It is also obvious that devaluation helps the growth of the Russian state budget revenues in terms of the rouble," the CBA representative said.
Translated by S.I.
Edited by S.M.