S&P Global Ratings forecasts Azerbaijani manat's exchange rate

Finance Materials 28 March 2020 16:19 (UTC +04:00)
S&P Global Ratings forecasts Azerbaijani manat's exchange rate

BAKU, Azerbaijan, Mar. 28

By Fidan Babayeva – Trend:

Exchange rate of Azerbaijani manat to dollar will remain stable, despite the volatility in world oil markets, Trend reports referring to the S&P Global report.

"Due to the sharp drop in world oil prices, we significantly lowered our outlooks for these prices for 2020-2021," the report said.

According to the report, this may lead to some slowdown in the GDP growth rate of Azerbaijan in 2020, with the possibility of recovery in subsequent years, and the pegging of manat’s exchange rate to the US dollar will continue, supported by large external assets of the government.

"At present, the manat is actually pegged to the US dollar and the exchange rate will remain stable, given the significant volume of the Azerbaijani government's foreign assets," the S&P said.

"If oil prices remain stable for a long time, the Azerbaijani authorities can go for some adjustment of the exchange rate to avoid a sharp reduction of foreign exchange reserves in the country," the report said.

S&P Global report also said that the coronavirus pandemic could have a short-term negative impact on the Azerbaijani economy and retail, trade and tourism could be under pressure.

Standard and Poor’s agency traditionally carries out an assessment of Azerbaijan’s credit rating twice a year, in January and July, and the last assessment was carried out on January 25 of this year and published by the agency.