Weekly economic review (June 27-July 1)

Analysis Materials 4 July 2016 16:19 (UTC +04:00)

Fitch: Azerbaijan restores credibility of national currency

Azerbaijan is gradually restoring credibility of its national currency, says a Fitch Ratings report on the sovereign credit ratings of the developing European countries.

The report says that the decrease of the recession level in Russia has influenced neighboring countries, including Azerbaijan and Kazakhstan.

“Both countries are gradually restoring credibility of their national currencies following adjustment of the forex rates in 2015,” says the report. “Despite the fact that the process in Kazakhstan is more rapid, the level of Azerbaijani manat’s credibility also increases.”

Currently, the Azerbaijani government takes certain measures to adapt to the processes that occur in the world economy, according to the Fitch report.

“Azerbaijan is gradually adapting to low oil prices and sharp fluctuations in the currency market that occurred in 2015,” says the report. “The government has already focused its attention on the provision of all necessary conditions and financial instruments to manage the floating exchange rate.”

Fitch analysts believe that the country will face double-digit inflation rates at the end of the year.

Earlier, Azerbaijan’s Finance Minister Samir Sharifov said that the inflation rate in the country is forecasted at the level of 10-12 percent in 2016.

The inflation rate was four percent in 2015 in Azerbaijan. Costs of foodstuff increased by 6.1 percent in 2015, nonfoods – by 3.8 percent and tariffs for paid services – by 1.2 percent.