Two Devaluations of 2015 Still Affect Economy - MP Vahid Ahmedov

Baku / 21.12.17 / Turan: Two devaluations of the manat in 2015 still affect the financial sector and the economy as a whole.

The MP Vahid Ahmedov told Turan about this.

He noted that in 2016 large funds were spent to keep the national currency rate, and the Central Bank tried to stabilize the exchange rate. According to him, however, it was possible only in 2017.

"The reason for the stabilization of the manat rate was the growth of oil prices, the growth of export operations, and increased control over the money supply," he said.

At the same time, the MP noted that in connection with the money supply control, the turnover of AZN has decreased, which in turn hinders the development of the real sector.

"The banking system of the country has not yet come out of the shock of the two devaluations. The decrease in lending, the increase in the volume of problem loans, and the continuing negative developments in the banking sector are the consequences of the devaluations."

The economist Natig Jafarli also believes the stressful situation of devaluations is still going on. In his view, the processes in the International Bank, as well as in other banks that are on the verge of default, and the closure of several banks last year are consequences of the stressful situation.

"The growth of problem loans, the decrease in lending by 4 billion manats, the inflation of 14%, and the rise in food prices by 18% are the results of these processes."

The expert believes that in fact, during the 2016-2017 period, the third devaluation occurred, as a result of which the rate of AZN against USD increased from 1.55 manats in early 2016 to 1.70 manats by the end of 2017. And this, in turn, means that the manat has weakened by 10% against the dollar and by 22% against the euro.

Natig Jafarli considers the relative stability of the national currency in recent months as a positive trend, noting that this was achieved not through a natural economic process, but through administrative methods.

Recall that in 2015 (February 21 and December 21), the government arranged two devaluations of the national currency, as a result of which the exchange rate of the manat weakened against the dollar from AZN 0.78 to AZN 1.55. -71D-