Central Bank of Azerbaijan talks another possible manat devaluation

Thu 14 June 2018 10:37 GMT | 10:37 Local Time

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Presently, there are no fundamental reasons for the devaluation of the Azerbaijani manat, Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said at the press conference in Baku June 14.

“Presently, the average annual oil price is $70, which is 30 percent more than in the same period of 2017,” he said, APA reports.

"High oil prices led to the growth of the country's strategic foreign exchange reserves and CBA foreign exchange reserves, which resulted in growth of strategic currency reserves by $2.1 billion,” Rustamov added.

“The growth of foreign exchange reserves in the domestic market shows that the supply in the market exceeds demand,” he said. “It is necessary to pay attention to this balance. The national currency rate is not always the target indicator for the CBA. Our main goal is inflation and the impact of the exchange rate on it."

In 2015-2016 as a result of two devaluations, the exchange rate of manat decreased more than twofold, compared to the US dollar. In 2017, the exchange rate of manat increased by four percent compared to the exchange rate of dollar through the monetary policy pursued by the CBA.

The exchange rate of manat increased by 0.01 percent compared to the exchange rate of dollar in January-March 2018.

Issue of 200 manat banknotes not to affect inflation expectations, says CBA head

The release of 200 manat banknotes is aimed at facilitating monetary circulation and reducing the government expenditure on the money printing, the Chairman of the Central Bank of Azerbaijan Elman Rustamov said on June 14 at a press-conference.

"The cost of money printing does not depend on the denomination, but on the quantity of bills. Indeed, the banknote of 200 manat is larger in size than the banknote of 100 manat, and the cost of its production may exceed the cost of printing 100 manat banknotes by 5-10 percent. But, when we order one 200 manat bill instead of two 100 manat bills, the cost savings is about 80-90 percent," Rustamov said.

The head of the CBA noted that, the issue of a new banknotes will not affect the macroeconomic dynamics and inflation expectations.

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