Baku, Azerbaijan, Oct. 12
By Taleh Mursagulov – Trend:
In the context of rising oil prices and payment balance surplus, the expectations are being formed in regard to strengthening of the rate of the Azerbaijani manat against the US dollar, the Central Bank of Azerbaijan told Trend Oct. 12.
"The rate of manat is formed depending on supply and demand in the foreign exchange market. And demand and supply, in turn, depend on the status of the balance of payments, as well as expectations regarding the rate of manat. In the context of rising oil prices and payment balance surplus, the expectations are being formed in regard to strengthening of the rate of the Azerbaijani manat," the CBA said.
"However, it is worth noting that significant strengthening can create conditions for the emergence of a number of macro and micro risks," the CBA said in a statement.
In addition, the CBA noted that increase in oil prices and an increase in the export potential of the non-oil sector have a positive effect on the payment balance surplus. It is expected that by the end of the current year the balance of payments will be surplus.
At the end of 1H2018, the net surplus of the current account of payment balance operations amounted to $3.5 billion, which accounts for 16 percent of GDP.
Speaking of interventions in the foreign exchange market, the Central Bank noted that the regulator purchased currency in small volumes and in limited quantities from the State Oil Fund at the auctions organized by the Central Bank.
In 2015-2016, as a result of two devaluations, the Azerbaijani manat fell more than twice against the US dollar. In 2017, the Azerbaijani manat strengthened against the US dollar by four percent due to the monetary policy pursued by the CBA.
In 1Q2018, the exchange rate of the Azerbaijani manat against the US dollar strengthened by 0.01 percent. Since March 2018, the rate of Azerbaijani manat against the US dollar has come to stay at the level of 1.7.
The official exchange rate on October 12 is 1.7 AZN / USD.