Banks Sell Currency in Limited Way (UPDATED)

On Monday, after the announcement of the USD rate by the Central Bank, a number of banks started to sell currency to a limited extent. Depending on the bank, there is a limit on the sale of foreign currency in the amount of $ 1,000 to $ 5,000 in one hand. However, the currency ends quickly.

Experts attribute what is happening with a growing foreign exchange shortage. According to the Central Bank, its currency reserves decreased $ 18.7 million in July.

 After the February devaluation, from March to July, the currency reserves fell from $ 11 billion 4.4 million to $ 8 billion 501.5 million.

Recall that on the 31st of July 2014 the CBA had foreign exchange reserves equivalent to $ 15 billion 193.4 million. In annual terms the Central Bank's foreign exchange reserves depleted $ 6 billion 691.9 million. -0-

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2015 August 24 (Monday) 11:54:14

The sudden shortage of US dollars, which began last Friday, is continuing, despite the assurances of the Central Bank of Azerbaijan on sufficient foreign currency in banks and strict instructions not to overstate the dollar.

The banks do not sell US dollars and only take them in exchange for the manat. Optimistic statements by the Central Bank that the shortage of dollars is artificial and the rumors are unfounded have not changed the situation. On Monday morning it was again impossible to buy USD at exchange offices in Baku.

Recall that last week USD banknotes of denominations less than $100 suddenly disappeared from the exchange offices and at the end of the week $100 banknotes were gone, too.

Rumors appeared about another devaluation of the manat (approximately 15%) against the dollar on Monday, saying the dollar will cost 1.20 AZN instead of 1.05 AZN.

In mid-July, the Chairman of the Central Bank of Azerbaijan Elman Rustamov admitted in an interview with AzTV that a new devaluation of the manat is not a real threat unless the oil price drops below $ 50 and the economic stability of the partner countries is spoiled. But then he tried to reassure the viewers: "I do not see any problems with the rate of the manat until the end of the year and in the medium term, if the average oil price remains at $ 50 and there are no major developments in the economies of our trading partners."

On the 24th of August the price of Brent crude fell below $ 45 per barrel, which can be considered a serious warning to the government.

As of August 1, foreign exchange reserves of the Central Bank of Azerbaijan (CBA) totaled $ 8.5 billion (minus $ 18.7 million to July 1). According to the report of the main financial regulator, for the past 7 months this segment decreased stability by $ 5.26 billion, or by 38.2%.

The rating agency Standard & Poor's predicts a shift in the current account surplus of Azerbaijan's payment balance at 2.2% of GDP, which is lower than five times compared to the year 2014, but not fatal. The surplus in foreign trade also remains positive - $ 633.988 million. In July, it also gave some optimism.

In February, due to the twofold drop in oil prices, Azerbaijan experienced a devaluation of the manat, devaluing it against the dollar by 34%. -0-

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