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Currency sterilization sharply decreases in Azerbaijan

15 February 2013 14:56 (UTC +04:00)

According to the report, parameters of exchange rate policy was determined by considering the situation of balance of payments, financial stability in banking sector and maintenance of competitiveness of non-oil sector.

Last year, the Central Bank realized its exchanged rate policy within the framework of dollar/manat bilateral exchange rate targeting. Existence of a large surplus in the country’s balance of payments caused advancement of supply over demand in the currency market. But in order to prevent significant intensification of exchange rate and neutralize negative impacts on competitiveness of non-oil sector, CBA realized currency sterilization worth $1.584 bn within a year. Note that, compared to 2011, currency sterilization declined by 2.6 times.

Consequently, exchange rate of manat against dollar strengthened by a total of 0.19% within a year. According to CBA’s calculations, stability of the exchange rate of the national currency positively impacted on stability of macroeconomic atmosphere and financial sector in the country.