Analyst: maintenance of interest rate of US FRS will not put pressure on AZN rate

Finance Materials 10 July 2019 10:42 (UTC +04:00)

Baku, Azerbaijan, July 10

By Sara Israfilbayova - Trend:

Maintenance of the interest rate of the US Federal Reserve System (FRS) will not exert significant pressure on the rate of the Azerbaijani manat, Zhannur Ashigali, associate director of the Sovereign Ratings and Forecasting Group at Russia’s Analytical Credit Rating Agency (ACRA), told Trend.

The expert noted that the rate of the manat, to a greater extent, is formed under the influence of the fundamental factors of the external sector of the country, rather than under the influence of the difference in rates.

"In 2018, the FRS repeatedly resorted to a rate change, and as a result, the rate was preserved as expected under the current conditions of contradictory statistics on the US economy," he said.

Moreover, the FRS itself gave diverse comments on the prospect of interest rate policy, adding ambiguities about the potential for changes in interest rate policy, Ashigali added.

"Theoretically, the decision was to support the base currencies in currency pairs with the dollar, since the decision leveled the potential for strengthening interest in the dollar, and this was observed for many currency pairs immediately after the June committee of the FRS," Ashigali said.

He also said that the price of the dollar has already managed to receive compensation in many currency pairs and, as a result, basically lacked any significant effect.

Following the meeting held on June 18-19, the FRS maintained the interest rate on federal credit funds in the range from 2.25 percent to 2.5 percent per annum.

($1=1.7 AZN on July 10)

Follow the author on Twitter: @IsrafilbekovaS