Azerbaijani Manat in Context of South Caucasus

The next devaluation of the manat by 47.7% from 1.05 to 1.55 manat per dollar proved a purely Azerbaijani event, the agency Turan believes.

In the neighboring South Caucasus countries Armenia and Georgia, the national currencies have long been in free floating and are not particularly responsive to conjecture of the global oil prices.

The Georgian lari and USD are in a ratio of 2.39 lari = $ 1. The lari exchange rate has noticeably reduced since 20 November 2014. And by the first AZN devaluation by 34% in February, the lari rate already was 2.26 instead of 1.76 per dollar. After that, it dropped slightly to 2.39 lari = $ 1.

The Armenian dram is in a ratio of 480 AMD = 1 $. Armenia moved to a floating exchange rate in 2009, and since that time AMD has fallen by 59% - from 307 to 480 drams per dollar. The last sharp decline in the AMD rate was seen in November and December 2014 - by 8.9% due to the fall of the ruble. The Armenian economy is also dependent on external conditions, but unlike Azerbaijan, which depends on oil prices, Armenia's economy is tied to the fluctuations of the ruble, which in turn is also sensitive to oil quotations.

The relative stability in the foreign exchange markets of Armenia and Georgia is dictated by the higher non-oil sector, the liberal economy and the tight monetary policy of the central banks. They intervene in the situation only at critical moments, carrying out foreign exchange intervention.

Azerbaijan to avoid currency excesses will have to move to the same model. The first step, i.e. the transition to a floating rate has already been made. The next steps, but now in the field of liberalization of the economy, may lead to stabilization of the rate on the example of the neighboring countries, said Turan. -0-