İn the morning, the official rate of the manat to the US dollar was 0.7855 / $ 1 (minus 0.0011 to the "fixed rate", lasted a year and 1.5 months). It's a little, however, to avoid the hype the Central Bank (CBA) has instructed local banks to ensure the free convertibility of deposits. Recall, February 16-17 banks refused to transfer manat deposits into foreign currency, and at exchange offices, even this morning, there were queues.
According to the CEO of CBA Elman Rustamov, today the volume of bank deposits in the country is more than $ 7 billion manat, the equivalent of half of which is in foreign currency. The trend of keeping money in dollars and euros emerged in recent years, when the trend of falling oil prices became apparent. In addition, if earlier rates on deposits in foreign currency were lower than their counterparts in the manat, today they are almost the same size, which also contributes to the trend.
Rustamov added that the transition to the use of the currency basket in determining the rate of the manat plus its devaluation will lead to an increase in dollarization of the economy. "This is a normal process in light of global circumstances, while imported inflation is unlikely because we provide the main types of food products for ourselves through our own production," he said, noting that at the end of 2015 inflation in Azerbaijan will be at a "low one-digit level".
According to optimistic forecasts of experts, the real inflation will be 20%. Already on February 17 more food rose in price by 15%, and excise goods - 20% or more. In addition, the official price increase of excise goods is expected on March 1st. Moreover, the devaluation of the manat would increase the cost of goods in the wholesale markets and the domino effect will result in an average annual inflation (food, non-food goods and services) at a rate of 25-30%.
Recall from February 16, CBA has moved to the currency basket (the US dollar and the euro) in determining the rate of the manat, which has caused a stir in the financial market. --17D-
Economics
-
Azerbaijan’s economy, which is heavily dependent on oil revenues, faces a stark warning in the 2021 report by Carbon Tracker titled “Beyond the Oil States: The Urgent Need to Reduce Dependence on Oil in the Context of the Energy Transition.” The report ranks Azerbaijan among the most vulnerable oil-dependent countries, placing it in the "5th group" — a category reserved for nations expected to experience a decline in oil and gas revenues exceeding 40% over the next decade. This group includes Angola, Bahrain, Timor-Leste, Equatorial Guinea, Oman, and South Sudan, highlighting shared economic risks for these states.
-
Azerbaijan's non-oil and gas exports rose 3.5% year-on-year to $2.8 billion during the first ten months of 2024, the Center for Analysis of Economic Reforms and Communication (CAERC) reported in its November "Export Review."
-
Azerbaijan Railways CJSC (ADY) will modify the schedules for commuter and domestic trains in line with the Cabinet of Ministers' decision to adjust work and rest days in November, aiming to ensure safe and comfortable travel during the COP29 event, the company announced.
-
In Azerbaijan, the government has increasingly relied on tax exemptions for imported goods as a tool to stabilize domestic market prices. The exemption from the 18% VAT on wheat imports, extended this year, exemplifies this approach. New measures have also been introduced, including tax relief on imports of electric vehicle chargers, while exemptions for high-cost medications are currently under discussion. Notably, defense imports continue to be free from taxes and customs duties.
Leave a review