Azerbaijan, Baku, Nov. 2 / Trend /
Ellada Khankishiyeva, Trend Analytical Centre Head
Azerbaijan will join the proposed Turkey TL-zone if the currency area will cover the area of trade between the countries. This confidence comes from the fact that Azerbaijan has long been planning to diversify its currency composition in mutual payments with trading partners and in particular with Turkey. Moreover, Turkey has been a leader in importing to Azerbaijan for many years. According to the State Customs Committee of Azerbaijan, goods worth about $1.040 million were imported from Turkey to Azerbaijan in January-September, which represents 15.38 per cent of the total import.
Turkey plans to build a TL-zone as an alternative to the Eurozone, Prime Minister Recep Tayyip Erdogan said during his official visit to Germany.
When the dominant currency of Azerbaijan's export-import transactions, namely the dollar began to weaken in 2009, the idea of the trade between Azerbaijan and Turkey in direct currency - manat-lira was highlighted. In addition, due to the instability of the U.S. dollar, the need for direct settlement is that large scale indirect conversion (manat-dollar, then dollar-lira) resulted in massive losses and loss of time.
It will not be difficult for Azerbaijan to become a member of the TL-zone because Azerbaijan in the face of the State Oil Fund of Azerbaijan (SOFAZ) this year began to acquire the Turkish lira as a reserve currency. Some 1.38 per cent of the total investment portfolio is concentrated in SOFAZ in January-September. The percentage of lira in the SOFAZ portfolio can increase in the future, taking into account the stability of the currency.
Leading Turkish banks in Azerbaijan, which number in the Azerbaijani banking sector is growing and can play a role in the participation of a TL-zone. Turkish İş Bankası also intends to acquire a bank in Azerbaijan. And the first Turkish bank in Azerbaijan Yapi Kredi Azerbaijan plans to expand its branch network in Azerbaijan to 40 in a few years. Reliability and stability of developing Azerbaijan's banking sector is attractive for Turkish banks.