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USD current exchange rate may further rise in Azerbaijan

07 October 2008 10:31 (UTC +04:00)

The fact is that dollar is not rising but euro is dropping rapidly in the country.
The National Bank of Azerbaijan said dollar strengthened 0.37% against the national currency (manat) while euro fell 6.7% on manat in early October.
However, euro/USD rate fell 5.8 on the world market.
Interestingly, the 15-nation currency is declining against the dollar against the backdrop of US financial crisis.
This depression is encouraged by the black clouds of bankruptcy on flying Fortis and Hypo Real Estate and the US Paulson plan.
Also, chaotic situation on the financial markets put pressure on the trend when the demand is exceeded by the demand.
Much of the euro-dollar move has been about the huge demand for dollar liquidity because investors prefer holding liquid assets rather than stocks. Also, there is the same situation in oil markets as traders try to sell November futures and cash their assets.
Analysts say the dollar may continue to rise against eh euro. But the $700 billion bailout package has not entered the market and no measures have been taken.
After this process, it is hard to forecast how the dollar will move but it will probably drop.
The sharp dollar-manat move is not expected while euro depreciation is expected in Azerbaijan.
One interesting point is that Azerbaijan may allow dollar appreciation in order to get the manat value of petrodollars increased if oil prices continue to fall.