The Central Bank of Azerbaijan’s Coin Business is Unprofitable for the State

The Central Bank of Azerbaijan (CBA) has introduced new 3-qapik coins. Previously, updated coins of 1, 5, 10, 20, and 50 qapik denominations were also issued. According to the bank's press service, the reverse side of the new coin features the emblem of the Republic of Azerbaijan and the year of minting, while other design elements and technical specifications remain unchanged. The new 3-qapik coins will circulate alongside the existing currency.

Economist Natig Jafarli has criticized the overseas procurement of new coins as financially unviable. On social media platform Facebook, he cited official information indicating that $5.845 million was paid to German companies for the production of 96,973 kg of metal blanks imported into Azerbaijan from January to November 2023. These blanks are used to produce coins. Consequently, the average customs price per gram of the blanks is $0.06, or 10 qapiks.

For 17,945 kg of blanks imported from Turkey, $1.263 million was paid, equating to $0.07 per gram or 12 qapiks.

Considering that the average weight of a coin (spanning denominations of 3, 5, 10, 20, and 50 qapiks) is approximately 5.1 grams and that the coins are made from various metals, Jafarli estimated that the cost of producing and importing each 3-qapik coin amounts to 25-30 qapiks.

The economist argues that such state expenditures on producing and importing low-value coins (1, 3, and 5 qapiks), especially as the population increasingly shifts to card payments, are economically unjustifiable. He questions whether someone in Azerbaijan might have vested interests in the coin production business.

"The state cannot afford to sustain a loss-making enterprise where the product’s value is 8-10 times less than the investment," Jafarli concluded.