The regulation of the national currency on the basis of the currency basket could lead to its gradual devaluation by at least 10%. According to local economists, this could happen, given the government's plans to equate the rate of manat to the euro.
Strengthening of manat inhibits the development of non-oil sector. In addition, maintaining the stability of the manat is quite expensive "pleasure" - only in January the Central Bank's foreign exchange reserves were depleted more than by $ 1 billion.
For a long time the government enjoyed the factor of "expensive manat" as an element of social protection and to curb inflation. Now, however, this policy does not catch up with global operations and adversely affects the financial and economic plans of the government. This step will lead to 5 -7% inflation this year, the head of the Central Bank Elman Rustamov said. However, the timing of transition to the two-currency basket is not disclosed.
The economist Rovshan Agayev believes that the estimated ratio of the currency basket (70/30% -USD / EUR) to determine the rate of the national currency portends not less than 10% devaluation of the manat.
In these circumstances, the official exchange rate of US dollar in Azerbaijan can "float" in a corridor 0.78-0.89 AZN / USD.
At the same time the rejection of the usual conservative economic policies and, as expressed by the Chairman of the Central Bank Elman Rustamov, the transition to a new economic model can awaken some “diseases” of the national economy frozen during the flow of light oil money and the escalation of inflation. And it is not in the interest of the government in the year of the first European Games in Baku.
We can assume that in a period of declining oil revenues, the economy will be "warmed up" due to taking illegal business structures and their monetary transactions out of the shadow. Under these conditions, the low rate of manat will stimulate both production and exports. It is possible that import operations accumulated in the hands of certain entities will be liberalized. --- 08B
Economics
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