Devaluation of USD against AZN expected

Finance Materials 22 May 2019 19:15 (UTC +04:00)

Baku, Azerbaijan, May 22

By Kheyraddin Nasirzade – Trend:

The US dollar is expected to decline against the Azerbaijani manat over the next 4 years, Trend reports referring to a report titled "Business outlook in Azerbaijan" prepared by Deloitte.

According to the report, the exchange rate of the US dollar is forecasted to drop to 1.69 manats by 2020, then to 1.66 manats in 2021, 1.64 manats in 2022, and 1.62 manats in 2023.

It was also stated in the report that the exchange rate of the euro against the manat will rise. As such, if the euro was 1.97 manats during the first quarter of this year, then its rate will rise to 2.06 manats in 2020. In 2021 and 2022, the rate will vary from 2.02 manats to 2.03 manats, respectively, then drop to 2.01 manats in 2023.

According to the Standard & Poor's analytical company, it is necessary to improve the effectiveness of monetary policy in Azerbaijan, as well as to strengthen the domestic banking system and capital markets.

The company also noted that the process of dollarization should be kept under check and the operational independence of the Central Bank of Azerbaijan (CBA) should be strengthened.

In April 2019, the CBA lowered the discount rate from 9 to 8.75 percent. The upper limit of the interest corridor has been lowered from 11 to 10.75 percent, and the lower limit from 7 to 6.75 percent.

($1=1.7 AZN on May 22)