!["Melting" Foreign Exchange Reserves - Sign of Capital Outflows, Expert Says](https://turan.az/resized/750/500/resize/media/2015/main/111000135985.jpg)
"Melting" Foreign Exchange Reserves - Sign of Capital Outflows, Expert Says
In order to cover the running costs the government for the first nine months of 2015 used $ 0.9 billion of stored foreign reserves of the State Oil Fund of Azerbaijan (SOFAZ).
The economist Rovshan Agayev says that foreign exchange reserves of the country this year are reduced not only in the accounts of the Central Bank, but also of SOFAZ.
In October this year the CBA currency reserves fell by $ 180 million. This is much less than in previous months. During the year the foreign exchange market "burned" $ 8.3 billion of reserves of the Central Bank. The pace of decline in foreign exchange reserves of the CBA was restrained by attracting resources to SOFAZ. Oil money was converted into manat and used for the fulfillment of obligations of the state budget. "If the government had not resorted to this step, the Central Bank's foreign exchange reserves would have amounted to no more than $ 5.9 billion," the economist underscored.
It is noteworthy that foreign currency reserves of the Central Bank today have fallen below the volume of bank deposits (7.6 billion manats). By the beginning of November, currency reserves amounted to $ 6 834 600 000.
Economists warn that there is no liquid manat mass. But there are enormous resources in the form of real estate, which, through the sale and conversion of foreign currency already serves as a means of capital outflow from Azerbaijan. This is a dangerous trend, taking into account the political risks of the country, and it threatens the foreign exchange market and the exchange rate of the national currency, Agayev said. --08B--
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