Baku / 19.03.20 / Turan: From March, GDP in Azerbaijan will seriously decrease, and a negative balance will appear in the trade balance, said an expert Natig Cafarli in an interview with the Azerbaijani service "Voice of America». The sharp collapse in oil prices also exacerbates the pressure on the manat, because behind it there is no other value except oil.
Will the stability of the manat be protected? Answering this question, the expert said that everything would depend on the political decision of the government and the CBA. For, the transition to a floating rate did not actually take place. For this, the country was not prepared either institutionally or economically.
In 2014, the CBA for two months supported the manat, spending $ 10 billion on it. In the end, all the same, I had to conduct a devaluation, and the manat fell in price to the dollar by half.
“In the current case, the government took a wait and see attitude, looking for what scenario events will develop. I think that a decision on devaluation will be made in a few weeks, because there is no alternative to this and maintaining the manat rate is simply impossible,” Jafarli said.
In addition to oil, Azerbaijan does not have economically active sectors. The government has always pointed to tourism and agriculture as an alternative. However, due to the coronavirus and the closure of borders, the tourism sector is actually drowning.
Because of the closure of borders with Russia, problems will arise in the export of agricultural products. All this will create additional problems for the economy. However, there will be no sharp devaluation, Jafarli believes.
“The government can administratively lower the manat rate to 1.90 -1.95 to the US dollar and stabilize at this point,” Jafarli said.
How will the population be able to protect their savings? Could there be a disruption in the supply of food? Answering these questions, Jafarli noted that he does not expect a food shortage. Do not stock up on products for more than a week, 10 days.
“As regards the protection of the savings of the population, one thing is clear: the Azerbaijani manat will never again strengthen its current level. Therefore, keeping savings in manats is not logical. There is no point in investing in other assets. For problems are expected in other investment instruments - real estate, gold. Even gold, which usually went up during periods of cataclysm, has fallen in price by $ 200 over the past 10 days. In such a situation, it is best to avoid unnecessary expenses. It is advisable to keep funds on hand in various currencies, creating a multi-currency basket,” said Jafarli. —06D-
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