Headline changed, details added (first version posted on 10:15)
Baku, Azerbaijan, Dec.21
By Maksim Tsurkov - Trend:
Azerbaijan's switching to the floating rate of manat is a coercive measure that is explained with the ongoing processes on the world currency market, expert Ogtay Haqverdiyev told Trend Dec.21.
Another reason is that the country carries out its foreign trade in dollars, he added.
"What we see now, is the real price of manat," said the expert.
The Central Bank of Azerbaijan made a decision to switch to the floating rate of manat from Dec.21, as a result of which, the national currency devaluated by nearly 50 percent.
The official exchange rate of the US dollar and euro to Azerbaijani manat was set at 1.5500 manats and 1.6850 manats, respectively on Dec.21.
He said this step taken by the Central Bank of Azerbaijan (CBA) can be assessed as the beginning of irrevocable move towards the real value of manat.
"I presume that the process of appreciation of dollar will gradually continue throughout 2016," said Haqverdiyev. "The real value of dollar can be 3-5 manats, according to my estimations."
The expert pointed out that restoring the CBA reserves is not the main goal of switching to the floating rate, adding that reserves are created to get out of such force majeure situations.
"But from the economic point of view, any national currency should be floating," said Haqverdiyev. "Its real price should determine the supply and demand principle on the currency market. In such a situation, economy also develops harmonically."
Further, the expert noted that currently, Azerbaijan's primary task is to develop the non-oil sector.
"Over 93 percent of our export accounts for oil and oil products," said Haqverdiyev. "It is necessary to develop the modern high-technology spheres of production, chose and manufacture products which will find their place on the world market and will be competitive."
Edited by SI
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