E.Rustamov: New devaluation of manat is inevitable under the collapse of oil prices

If world oil prices fall sharply, it will also affect the rate of national currency of Azerbaijan, stated  the head of the Central Bank of Azerbaijan (CBA) Elman Rustamov, speaking at a meeting of the parliamentary committee on economic policy. According to him, new devaluation of manat is not expected, but in the case of a sharp drop in oil prices, the manat will be adapted to these conditions.

Referring to the predictions of the largest financial institutions, Rustamov said that the price of oil for a long time will be at the level of 50-55 dollars per barrel.

Based on this, Azerbaijan's state budget for 2016 will be made, based on the price of 50 dollars per barrel, Rustamov said.

Referring to the devaluation of the manat on February 21, he said that it was the result of a sharp drop in global oil prices. He further said that in the future the CBA plans to move to a floating exchange rate of manat. Now it does not seem appropriate, since there are three organizations making large foreign currency - State Oil Fund, the Central Bank, and the company SOCAR.

The transition under the current situation to a floating exchange rate can cause sharp fluctuations in the rate of manat in one direction or another, which has a negative impact on the economy.

Rustamov noted that in Azerbaijan continues  the process of dollarization. According to him, after the devaluation of the manat in February, the Central Bank sold on the market more than $1 billion to maintain the current rate of manat. According to Rustamov, the dollarization process will continue at a slower pace in April-May and will  calm down.-06D-