Phased transition to floating exchange rate regime needed, Azerbaijan says (UPDATE)
Details added (first version posted on 12:01)
Baku, Azerbaijan, Feb. 12
By Anvar Mammadov - Trend:
Transition to the floating exchange rate regime of the Azerbaijani national currency (manat), should be carried out in stages, Elman Rustamov, chairman of the Central Bank of Azerbaijan, said at a press conference in Baku on Feb. 12.
He noted that this process requires certain time and the adoption of a number of regulatory decisions.
“The fact that the exchange rate of the Azerbaijani manat against the US dollar has stabilized at 1.7001 AZN/USD doesn’t mean that the CBA refused to fully switch to a floating exchange rate regime of the manat,” Rustamov said.
Rustamov noted that the CBA doesn’t pursue policy of active intervention in the processes in the currency market.
“We don’t buy or sell currency at auctions,” he said. “At the same time, we don’t want to allow sharp weakening or strengthening of the manat. As I already said during my speech in the Azerbaijani Parliament late last year, this may lead to a number of undesirable macroeconomic and microeconomic risks. So, presently, we pursue an “interim regime” policy, which is an integral part of the full transition to the floating exchange rate regime of the national currency.”
“There goals are set before us - a stable exchange rate with low volatility, cheap currency and low inflation,” said Rustamov. “All these goals are equally important. Regarding the growth of currency reserves of the CBA, this is related to the return of debts by commercial banks.”
The Azerbaijani government switched to the floating exchange rate regime of the manat on Dec. 21, 2015. The exchange rate of Azerbaijan’s national currency, the manat, against the US dollar has strengthened by 9-12 percent since early February 2017.