Banks Sharply Reduced USD Purchase Rate

On January 11 commercial banks of the country have sharply reduced the rate of purchases of foreign currency from the population.

Most banks, which yesterday bought USD at 1.83-1.84 manat per dollar, today lowered the rate of purchase to 1.77-1.78 manat.

However CBA has not changed the dollar rate on January 11, leaving it at the level of 1.7742 manat.

Commenting on the happening, the economist Natig Jafarli said the decision of the banks was associated with the foreign exchange auction on 10 January.

“Usually USD 30-40 million is exhibited at the auction, but on January 10 the proposal was 5-6 times more, while the exact figure is not known,” Jafarli said.

The economist noted the increase in supply of foreign currency at the auction is the right decision.

“Restoration of currency sales will reduce the hype, weaken the black market and reassure the population and entrepreneurs,” the expert said.

Jafarli said that along with the USD purchase rate, the banks should have also reduced the selling rate.

“Banks are trying to get the maximum from foreign exchange transactions, using the margin of 4%. However, to eliminate the black market the rate of sale of foreign currency should be also reduced,” he said.

According to him, the situation was also influenced by the government's decision to transfer AZN 7.5 billion from the State Oil Fund to the Central Bank. This will allow CBA to engage in foreign currency transactions. -71D-