The Sunday before last could be called as a �black day’ for US dollar in Azerbaijan. If on Friday the US dollar in regarded to Azerbaijani manat was a bit higher than 4500 manats. On Saturday it first dropped to 4300 manats, then to 4100 manats, while late the day - 4000 manats. Drop in rates continued on Sunday, when some exchange places sold dollar at 3800 manats. Over 2 day-offs cash dollar rates fell 15%, which is enough to obscure the popularity of the currency in the country.

However, as a result of extreme measures taken by the government on Monday it was possible to restore the lost positions and return to rates at 4500 manats. On Tuesday it was restored in the point of 4520 manats. Starting on Wednesday the cash dollar market to its traditional course, exactly following the rates set by the National Bank of Azerbaijan.

Drop in US rates caused many questions in the society, which were on the focus of many governmental and independent experts. Their opinions rarely were the same: the cash dollar was artificially decreased.

Economy didn’t give signal…

The long-term fall in the rates of US dollar in Azerbaijan is based in three factors, characterized with a rise in public sector deficit. The least leads to a rise in domestic demand and intensification of the inflation rates in the country. In case of intensification of inflation the NBA is faced with the difficult dilemma. On the one hand, it is necessary to control the inflation, on the other to control over the exchange rate of the national currency to maintain it within the limits not evolving any problem for the foreign trade. It is impossible to reconcile the two tasks in the current realities of Azerbaijan. If it is necessary to cut money supply, then turns out necessary to purchase less currency in the market and let the dollar fall. From the aspect of the foreign trade extreme drop in dollar rates is not profitable for Azerbaijan, as it complicates the state of local exporters and fields, oriented at domestic demand with simultaneous improvement of the state of importers. In this situation the NBA turned out an active player of the currency market, enabling the dollar to fall. Since the beginning of the year the official rates of the US dollar fell 338 points.

However, fall in the official rates occurs fluently, and the process is under the control of the NBA and the government. A day before the collapse the US dollar rates was fixed at 4577 manats It testifies that that there was not any macroeconomic reasons for sharp drop in cash dollar rates.

Dollar вЂ" a victim of speculation

The reason for drop in the rate of cash dollar was explained with deficit in the national currency.

"The crisis of the cash currency rate of US dollar was a result of negligence by the bank which did not acquire the national currency from the National Bank of Azerbaijan (NBA) on Friday to ensure the activities of the exchange places. The banks which received the national currency did not distribute it among the exchange places, motivating that the exchange places should independently purchase and sell currency," the Cabinet of Ministers said.

However, the path leading to the crisis of dollar was clarified. The NBA ceased the activities of 20 exchange places. “The NBA will defend the rights of people who suffered during the exchange of US dollar at groundless rates. The citizens are only required to produce the checks received from the exchange place. Almost all prominent independent and opposition experts shares the opinion that artificial deficit evolved by commercial banks in the national currency was the key reason causing drop in dollar rates.

After all…

No one could doubt that a drop in US dollar rates was a result of speculative attacks. The scale of fall of the cash rates of the US dollar and the period of collapse (day-offs at the currency exchanges and absence of the head of the NBA) testify for artificial agiotage around dollar.

However, deeper analysis of the situation enables with more prudence to suppose that the initial reason for the happened was a natural absence of manat reserves, which appeared as a result of long macroeconomic tendencies. The profiteer only benefited the situation and decreased dollar. Firstly, complications in the cash market gave to know several months ago, when there appeared a deficit in manat in the International Bank of Azerbaijan. Secondly, the situation in the cash currency market remains tense, though the players more probably do not have �clumsy’ spirits. The deficit in the cash-vending machines of the IBA also testifies for it. However, a deficit in the national manat is a result of inflation targeting policy, which promotes gradual transition of dollar in economy. The monetary authorities seem to grant a respite to the cash dollar market. But it is a temporary measure. The official rate of dollar will continue dropping even in such a tendency, even if no further fall appears in cash dollar rates,
while a problem of deficit in manat can remain and event strengthen.

Turkey's export of leather goods to US down
Turkey's export of leather goods to US down
Ministry:  Export markets of Georgian products annually increasing
Ministry: Export markets of Georgian products annually increasing
Iran reveals value of trade turnover with Thailand
Iran reveals value of trade turnover with Thailand
Loading Bars
Amazon to launch online drug sales in Indian city
Uzbekistan’s tourism and investment potential presented in Turkey
Pakistan army says border fencing with Iran to be completed by end of 2021
Number of request related to computer security drops in Azerbaijan
Japan allocates about $ 3 mln to Kyrgyzstan within framework of scholarship program
UK ready to share its renewable energy dev't experience with Uzbekistan (INTERVIEW)
Kutaisi International University Ready to Receive First Students
Iran's Embassy in Lisbon slams US attempts to extend arms embargo on Iran
Gunmen kill at least 14 in Nigeria attack
17 killed in fighting between Yemeni troops, Houthis in al-Jawf
EU to enter contract talks with J&J over 200 million doses of potential COVID-19 vaccine
Mexican central bank cuts rates to 4.5%, but pace of cuts might slow
'Massive poisonous shock': Scientists fear lasting impact from Mauritius oil spill
Brazil not yet ready to buy Russia vaccine, says health minister
New Southern California wildfire expected to linger for days
Zarif arrives in Beyrut
Turkey reports 1,243 new COVID-19 cases
Demand of Azerbaijani banks at foreign exchange auction grows
Indonesia's capital extends social restrictions for 4th time
Turkey's export of leather goods to US down
Ministry: Export markets of Georgian products annually increasing
Iran reveals value of trade turnover with Thailand
Kazakhstan increases import of French-made goods despite COVID-19
Average monthly wage rises in Azerbaijan
Azerbaijan, Iran discuss project for building power plants on common border
Ukraine reveals volume of seven-month import of Azerbaijani oil, petrochemicals
Russia leading among gasoline, diesel fuel exporters to Georgia
Several charter flights to be operated from Tbilisi International Airport
Interest rates on government securities decline in Georgia
Iran's auto part makers need financial support to continue production
Azerbaijani foreign minister receives Georgian ambassador (PHOTO)
NBG expects growth of larization to continue in Georgia
Azerbaijani consul general in LA meets with US Jewish Committee's members (PHOTO)
National Bank of Georgia sells funds to stabilize lari
Kazakhstan's Air Astana resuming flights to Germany
New type of fertilizer to be produced from greenhouse waste in Azerbaijan
Demand for Azerbaijani Central Bank's notes tops supply three-fold
Georgian Magticom starts testing 5G technology stations
Georgia sees increase in import of gasoline, diesel fuel
Turkish Defense Minister: We're with Azerbaijan till the end in its struggle against Armenia
Azerbaijani ambassador to Serbia detained as suspect
Kazakhstan's Development Bank talks measures to reduce COVID-related negative impact
President Ilham Aliyev receives delegation led by Turkish Minister of National Defense (PHOTO)
Azerbaijani Nakhchivan Autonomous Republic records decline in cargo shipment volume
Spain says U.S. should waive tariffs on EU goods as wine, olives hit
Oil transportation volumes between seaports of Kazakhstan, Azerbaijan revealed
UNDP supports vulnerable groups in Uzbekistan affected by pandemic
Azerbaijan confirms 211 new COVID-19 recoveries
Georgian Lagazi wine cellar plans to put dried fruit on market
Prices for gold, silver growing in Azerbaijan
Turkmenistan increases exports of petroleum products to EAEU
Azerbaijan's Nakhchivan sees growth in agricultural production
Issuers of Kazakhstan's AIX gain means to offer ruble-denominated instruments
Iranian Auto Part Manufacturers Association suggests privatization of auto industry
Austrian PÖTTINGER to establish agriculture machinery production in Kazakhstan
Uzbekistan to implement safe city project in all its regions
Containers cargo handling skyrockets at Kazakhstan's Aktau port
Georgia to subsidize purchase of non-standard apples
Uzbek-Korean JV extends tender to buy high-temperature fiber
Iran's exports from West Azerbaijan Province decrease
Turkish cybersecurity developer to expand presence in Azerbaijani market
BP working to achieve startup of Shah Deniz East South flank in 2021
BP expects to complete full processing of D230 data in Q3 2020
BP updates on progress in Azeri Central East project
Namangan Free Economic Zone of Uzbekistan talks its achievements during 1H2020
Branch of Russia’s Tatneft in Turkmenistan opens tender for production of storage racks
Iran's Bahar Azadi gold coin starts to rise price
Uzbekistan aims to increase number of ropeway resorts
German union says Lufthansa stopped negotiations on crisis management and jobs
UAE giant Majid Al Futtaim to support retail sector modernization in Uzbekistan
Licenses issued to manufacturing enterprises in Iran's Yazd Province
Iran discloses number of electricity, water facilities put into operation
South Caucasus Pipeline sees y-o-y increase in operating expenditure
Deadline for vehicle customs clearance extended until March 2021 in Georgia
Turkmenistan’s Turkmenstandartlary announces tender for metrological equipment purchase
UNCTAD talks its forecast for investment in Turkmenistan
Foreign trade turnover of Azerbaijan's Nakhchivan grows
Uzbekistan, Kazakhstan to build joint center for trade, economic cooperation
New irrigation lines commissioned in Iran’s two provinces
BP discloses number of drilled wells for Shah Deniz 2
Turkey unveils number of cars shipped via its ports from January through July 2020
Iran’s Markazi Province exports greatly exceed imports
Azerbaijani oil prices continue to fluctuate
Azerbaijan's electricity export increases
Shah Deniz increases gas output year-on-year
Turkmen polypropylene sold at state commodity exchange almost every week of July
Oil exports via Baku-Tbilisi-Ceyhan down
Over 2,500 new COVID-19 cases registered in Iran
Lenovo sails past expectations with 31% first-quarter profit jump
Azerbaijani currency rates for August 13
Sangachal terminal increases daily gas exports from Shah Deniz
Azeri-Chirag-Gunashli increases associated gas deliveries to SOCAR
Azeri-Chirag-Gunashli production down in H1 2020 y-o-y
EU wants to negotiate solution with U.S. on aircraft subsidy row
Data on polyethylene sales at Turkmen State Commodity Exchange for July 2020 revealed
BP increases capex on Azeri-Chirag-Gunahsli
President Ilham Aliyev phones Russian President Vladimir Putin
Greenfields Petroleum increases capex in Bahar-Gum Deniz
French Carrefour to be first international grocery retailer in Uzbekistan, Central Asia
Philippines reports 4,002 more coronavirus infections, 23 deaths
All news