ADB: New Wave of Devaluation to Take Place

The Asian Development Bank (ADB) in the review of Asian Development Outlook 2015 Update assumed a greater probability of a new wave of devaluation of the manat. For this purpose there are all preconditions - the persistence of low oil prices on world markets and the reduction of foreign exchange reserves - say the authors of the analytical material.

In particular, from January to September, foreign exchange reserves of the country declined by more than 30%. In addition, since September last year oil prices dropped sharply. These prices made possible the denomination of the national currency in 2006, followed by stabilization of its rate against the dollar and the euro (in August last year it was $ 103.08 price per barrel).

In addition, the drop in oil prices triggered a dollarization of deposits of the population and entrepreneurs - a month before the devaluation of the banking sector experienced the biggest problem - the amount of deposits in that currency has almost doubled, and private institutions were forced to convert manats into dollars, analysts of ADB said.

As for GDP growth for this year, the international financial structure predicts it at 3%, and next year - 2.8%. Inflation at the end of this year is expected to reach 6%, and next year - 5.5%.

With the reduction in oil prices has worsened the forecast surplus of Azerbaijan's payment balance. This year the figure is estimated at 6% of GDP (in March, the ADB predicted 12%), in 2016 - 8% of GDP. One reason is the expected decline in exports, with increased imports. --17D-