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Euro dips to 6-year low in Azerbaijan

13 November 2008 11:13 (UTC +04:00)

The central bank said the 15-nation currency dropped to AZN 1.0093, a six-year low, on November 13.At the same time, both the euro and the dollar have fluctuated recently.

Azerbaijani manat is directly affected by the euro-dollar moves on the world market.
However, due to the macroeconomic reasons and monetary policy, the rising euro against the dollar manifested itself in Azerbaijan through bringing the euro down and pushing the dollar up against the manat.
Because the euro doesnâ€™t take so important part in Azerbaijanâ€™s economy and currency basket, the euro is more sensitive to global trends.
The dollar fell 4.2% and the euro dipped 19% against the manat since early this year.
The dollar has recently started to appreciate in the country, pushing down the euro.
In general, around the world, the euro has sold off sharply in recent months, with economic growth prospects for the 15-nation euro zone deteriorating sharply after the financial crisis that started in the United States spilled over to the rest of the world.
Several currency traders now say they expect the dollar to reach parity with the euro by the end of this year.
In the world markets, the euro fell to a two-week low against the dollar on November 13 after Germanyâ€™s economy entered its worst recession in at least 12 years, spurring speculation the European Central Bank will cut interest rates.
The probability of the euroâ€™s declining to parity with the manat has accelerated the euro selling-off in Azerbaijan.
The euro selloff rose to â‚¬14.5 million in Azerbaijan during September alone from â‚¬3.35 million in August (by 4.3 times).