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Popular trust in euro drops sharply in Azerbaijan

12 November 2008 07:58 (UTC +04:00)

The National Bank of Azerbaijan said the 9-months euro exchange transactions exceeded the 2007 full-year euro exchange transactions by 12.2%.
The euro sell transactions accounted for â‚¬568 780 200 of the total euro exchange transactions, leaving â‚¬46 194 700 to â€œwe buyâ€ transactions.
The â€œwe sellâ€ transactions rose by 97% and â€œwe buyâ€ transactions increased by 4.5 times over the period of January-September.
That is to say, â€œwe sellâ€ transactions exceeded â€œwe buyâ€ transactions by 12.3 times.
Below is the dynamics of euro cash exchange transactions over the past three years:
Interestingly, the amount of â€œwe buyâ€ cash euro exchange transactions in September reached a monthly high, accounting for 95% of the 2007 full-year volume.
In general, a sharp increase in transactions in the euro has become evolutionary in Azerbaijan.
This is directly related to the increased role of the euro in general economic trends, retail payments, and its use of a means of savings.
However, a sharp increase euro sale in September was unusual.
The bulk sale of euro by the people of Azerbaijan in September is linked to the recent fluctuations of the 15-nation currency on the foreign and domestic markets.
Note that there are similar processes around the world: the people and investors turn their assets into the US dollar, dramatically increasing the demand for U.S. currency.
As a result, the credibility of the euro has fallen sharply in Azerbaijan.

Thus, the euro sales to banks by the people rose to â‚¬14.5 million in September alone from â‚¬3.35 million in August (by 4.3 times) while the euro purchase nearly halved to â‚¬43.9 million from â‚¬96.5 million.