Real effective exchange rate of manat on non-oil sector consolidates by 17%
Baku, Azerbaijan, Feb.27
By Azad Hasanli - Trend:
In order to prevent significant consolidation of manta (AZN), and thereby eliminate the negative impact on the competitiveness of the non-oil sector, the Central Bank of Azerbaijan (CBA) conducted sterilization of currency in the amount of $1.27 billion in 2014, said the report of the Central Bank's Monetary Policy on the results of 2014.
"Under the psychological impact of a sharp devaluation of national currencies in neighboring countries in December 2014, demand for dollars increased in Azerbaijan, which is why the central bank carried out operations on the sale of foreign currency," said the message.
To this end, in December 2014, the CBA implemented intervention worth $1.127 billion. As a result, the surplus for operations on the acquisition of foreign currency on the market amounted to $142.8 million.
In 2014, the CBA continued the exchange rate policy in 2014 within the framework of bilateral targeting of USD/AZN rate.
It is noted that supply exceeds demand in the reporting period in state of a surplus of the balance of payments on the currency market.
Since the beginning of 2015, manat rate versus USD rate has not changed, and consolidated by 0.02 percent.
The dynamics of the nominal bilateral exchange rate of manat has influenced the change of the dynamics of the real bilateral exchange rates. During the reporting period, manat consolidated both nominally and really in relation to the currencies of the Eurozone, UK, Russia, Ukraine, Kazakhstan, Turkey, Georgia, South Korea, Japan, China and Israel. Manat really cheapened against the currencies of the United States, Iran, Belarus and Switzerland.
In 2014, the nominal effective exchange rate (NEER) of manat on the non-oil sector in the total trade turnover rose by 24.6 percent. Consolidation of NEER by one percent leads to lowering of prices by 0.28 percentage points, according to the model estimates.
The difference in consumer prices had a downward pressure on the real effective exchange rate (REER). During the reporting period, REER on the non-oil sector consolidated by 17 percent.
Edited by CN
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