Details added (first version posted on 10:48)
Baku, Azerbaijan, May 30
By Anvar Mammadov – Trend:
Azerbaijan’s national currency, the manat, has strengthened by 4 percent since early 2017, said Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov.
He made the remarks at a conference titled “Economic reforms: results and advices” in Baku on May 30.
Rustamov noted that the manat has strengthened by 11 percent since reaching its worst indicator and currently there is no threat to the stability of the manat’s exchange rate.
“We don’t see significant risks for the manat’s exchange rate until late 2017. I would even say that now the risks of manat’s strengthening are significantly higher than the decline risks,” said Rustamov.
According to him, during the five months, the fully floating exchange rate regime operates in Azerbaijan, and over this period, the Central Bank didn’t resort to serious interventions to maintain the manat’s rate.
“Firstly, there was a period of destabilization, which was related to the expectations of market participants. This led to significant cheapening of manat. However, later the market itself regulated the manat’s rate, and it stabilized. Today, the foreign exchange market is not a demand market, but a supply market,” added the CBA head. “Taking into account Azerbaijan’s strategic goals, strong strengthening of the manat in the medium term may create problems for the balance of payments, given the current measures to reduce import and support export.”
The Central Bank of Azerbaijan completely switched to a floating exchange rate regime on January 12, 2017. After that, the manat’s rate decreased by 10-15 percent for a short period of time against the world currencies. However, then the rate began to stabilize and since early February (the lowest rate of manat since early 2017) has strengthened by 9-12 percent.