Natig Jafarli: sharp devaluation broke faith in manats

The fall of the manat, will slowly  continue, believes the executive secretary of the Movement "Republican Alternative» (ReAl), economist Natig Jafarli.

Commenting in an interview with Turan  the causes of  weakening of the manat, Jafarli noted that Azerbaijan's state budget revenues by 66% dependent on oil, and taking into account the indirect factors - by 80%, and foreign trade  is dependent on oil by 95%. Therefore, the weakening of the manat is connected with a sharp reduction in foreign exchange income due to falling oil prices.

Another factor was the decrease in remittances from Russia. According to official data, annually foreign exchange revenues totaled $ 2.5 billion. According to recent reports, they were down by three times. These two factors have created the basis for the devaluation of the manat. Negative impact on the financial and economic situation have: corruption, poor governance state resources, serious violations of public investment.

The current government has been  ruling the country for 22 years, and during that time there was an opportunity to weaken the country's dependence on the oil factor, but they did not make  serious reform.

Today, the share of non-oil exports is only 2.3%. That is, even after the current devaluation it will take years that Azerbaijan could export to the world market competitive products in the non-oil sector.

The President said that before the devaluation every day dealers  bought  in the currency market 500 million dollars. Is this possible?

Responding this question, Jafarli said that a month ago, Ilham Aliyev has signaled that AZN 1 can be equated with 1 euro.

Then the head of the Central Bank Elman Rustamov said the gradual devaluation of the manat.

Naturally, this has created a stir and people began to change manat for dollars, and it  does not mean violation of the law.

On the other hand, with a high degree of confidence we can assume that many officials  were informed in advance about the devaluation. Therefore,  they hastily changed manat currency, increasing excitement.

Financial security is part of national security. The presence of a sustainable economic model, a sound banking system are components of overall security.

Unfortunately, such a chaotic, not sequential steps undermined confidence in the manat, the financial and banking system, and the coming years will not be able to restore it.

This suggests that in the future  AZN will continue to weaken. According to all forecasts, in the near future  the increase of prices for oil is unlikely," concluded Jafarli.-03C06-

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