Azerbaijani official: Manat rate unlikely to drop further

Azerbaijani official: Manat rate unlikely to drop further
# 28 January 2016 11:50 (UTC +04:00)

According to him, no country in the world — including Azerbaijan — or any leading financial organization had predicted such a drop in the prices of energy resources.

Hasanov noted that Azerbaijan is an oil exporter and therefore a significant portion of state financial system is made with revenues from the export of energy resources.

“Financial flow into the country suddenly saw a dramatic decrease as the oil price decreased by four times, so there was a need to keep the manat rate stable at the expenses of resources. For how long could this situation last? Could the Azerbaijani government allow the financial resources to be depleted completely? On the other hand, regional countries that are main trade partners of Azerbaijan had, almost a year ago, faced the devaluation of their national currencies and applied the system of “floating rate.” This caused some imbalance in Azerbaijan’s foreign trade relations and hindered the investment flow into the country’s economy. What’s more, manat had gained considerable strength against dollar and euro, which was no good at all. Even at the time euro was losing value against dollar, it was impossible to stabilize the manat rate. This is why the decision of devaluation and applying the “floating rate” regime was taken. The current rate is fair and the manat rate seems unlikely to drop any further,” he said.

The official disagreed with the notion that devaluation is a totally harmful phenomenon, saying international experience and also the experiences of different countries reveal that devaluation, despite causing worry and panic among the population in the beginning, may later give impetus to the dynamic development of a country’s economy and banking-financial system.

“Nevertheless, the worry following the first devaluation in last year’s February did not last long and the country’s financial market met no serious challenges. On the other hand, the devaluation pushed the Azerbaijani government to expand its capabilities of maneuvering, creating fertile ground for extra measures to be taken in the social sphere,” he added.

Hasanov noted that experts from Moody’s, a leading international rating agency, are of the opinion that the Azerbaijani government’s decision to apply the “floating rate” regime was the right decision, which became an additional support to the state budget and is now helping local production gain in competency.

1 2 3 4 5 İDMAN XƏBƏR
#
#

THE OPERATION IS BEING PERFORMED