Baku, Azerbaijan, May 2
By Anvar Mammadov – Trend:
The decisions of the US Federal Reserve System (FRS) are gradually exerting less influence on the rate of the Azerbaijani manat, expert and economist, Doctor of Economics Muslim Ibrahimov told Trend.
"The country is currently implementing a floating exchange rate regime, but at the same time this regime is under the analysis and certain control of the state. Therefore, we can respond to fluctuations in the rate of the manat. In addition, discussion is underway on transition to payments in national currency of Turkey, which will also reduce the impact of the FRS decisions on the manat rate," Ibrahimov said.
The expert noted that the increase in the key interest rate, which will be discussed at the next FRS meeting, will not come as a surprise to world markets.
"The FRS has already announced its intentions to raise key rates at least three times in 2018. And after such statements, the increase of the rate at the next meeting will not be a thunderstorm in a clear sky. And most of the world's economies, which are one way or another connected with the US economy - and almost all of them are connected with it - have pretty much adapted themselves and introduced some harmonization into their macroeconomic policies. Basically, this is the use of a floating exchange rate of national currencies, which allows somewhat secure macroeconomic stability. As for the impact of the increase in the FRS key rate on commodity markets, it is no secret that this possibility has already been considered. So I don't expect big changes in the conjuncture of the US markets," said Ibrahimov.
At the end of March, the FRS decided to raise the base interest rate to 1.5-1.75 percent. As for the scheduled meeting of the regulator, experts believe that in the spring session, the Federal Reserve Bank may take a wait-and-see position for a detailed assessment of the economic condition in the US. Thus, investors now predict the probability of FRS's maintaining the interest rate at the level of 95.3 percent.
The next meeting of FRS will be held on May 2-3.
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