Finance

Finance

Elman Rustamov: â€œThe Central Bank will not allow free changes in the floating rate of manat "

21 December 2015 18:41 (UTC +04:00)

"In June of last year, oil on world markets fell by more than three times. This significantly reduced the revenues of Azerbaijan, had a significant impact on the balance of payments. But the foreign exchange markets and the rate are influenced not only by the decline in oil prices. The continuing devaluation of the partner countries played no less important role. In recent months, due to the increased volatility of the national currencies of some countries, national currencies depreciated by 100%. For example, the Iranian rial in the past three years was devalued by 120%, Kazakh tenge - 108, the Russian ruble has depreciated more than twice. The devaluation of the manat happened once. We have close relations with the aforementioned countries. Taking into consideration the serious pressure on the foreign exchange market, the rate of manat in February of this year was devaluated. The economy, the currency market, the rate of manat has been adapted to the oil price of 50-55 US dollars. The newly created situation forces to take new steps. In this connection, it was decided to move to a “floating rate”. This float is called a managed float. This means that we will not allow a significant change in a rate of manat. A significant deviation from the current rate can lead to serious confusion in the market. Today we held the first auction on the market. We also changed the operating framework for the exchange rate. Before that we used to meet the market demand in the currency completely, but now we will offer the market a certain amount of currency through auctions and we will consider supply and demand proportions.”