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Azerbaijanâ€™s currency market seem unsteady

22 September 2008 13:14 (UTC +04:00)

The total turnover in the currency market reached $55.045 million. Daily trends were also seen different last week.

That is to say, organized foreign exchange market turnover surpassed the previous week by 20.6%.
The exchange rate of the US dollar (based on the trading at Baku Interbank Currency Market) rose 0.1% from AZN 0.8123 to AZN 0.8114.
The official rate strengthened by 0.18%, cash buy rate increased 0.21% and cash sell rate went up 0.15%.

According to the trend of rates, the official rate seems unstable. This was also observed in euro trend.

The dynamics of euro for euro is asymmetric because these two currencies are antipode on the foreign markets.
When dollar rise, euro falls as a result. The unsteady dollar in Azerbaijan is attributed to fluctuations in the global market.
Another feature of the foreign exchange market was last week that fact that cash buy rate got closer to the exchange rate. Besides, cash sell rate remained higher. That means that cash market participants tried to buy cheap dollar and sell it at higher prices, the margin was much wider than usual, as shown in the chart. Thus instability official rate was the result of speculative sentiment in the cash market.
The financial crisis of Lehman Brothers, Merrill Lynch and American International Group (AIG) played havoc with the markets.
Under the rescue plan, the Federal Reserve will make available an $85 billion revolving credit line to AIG (ticker: AIG). In return, it will receive warrants that, upon exercise, would give the government a 79.9% common-stock interest in the company.
Russia’s government has pledged more than $100 billion in emergency funding to help ease liquidity problems in the banking system

Market players didnâ€™t made time to understand what were going on. All the moves plus oil prices caused indecision in the market.