Gubad Ibadoglu: AZN cannot be saved without liberalization of the market

The way out of the situation is the liberalization of the foreign exchange market and support a competitive investment environment, this is  how  Gubad Ibadoglu,   the head of Azerbaijan Economic Research Center commented on his Facebook page  the excitement caused in recent days in the foreign exchange market. There is a rapid process of dollarization of the economy of Azerbaijan, the country's foreign currency reserves sharply reduce. In the first half  of the year 72.4% of bank deposits were  transferred into dollars. International currency reserves of the country decreased by half. These data is based on calculations of the CBA. Both figures show a significant weakening of the position of the AZN, and accelerate the reduction of official reserve assets. Both trends do not promise good prospects of the Azerbaijani economy.

The first contributes to the dollarization of the economy and its dependence on external factors and outflows of capital. The second reduces the possibilities of maneuver of the CBA and makes vague future of the national currency in the medium term.

"The way out of the situation is in the liberalization of the foreign exchange market and support a competitive investment environment. At present, the only alternative is economic freedom and healthy competition, trade openness without corruption, the economy, formed on the basis of sound fiscal policy," said Ibadoglu.

Therefore, the government should first of all strengthen the fight against corruption and monopolies, diversify and liberalize the economy. -06D-