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    The Currency Market in Azerbaijan: Realities, Volatility and Perspectives

    Khankishiyev, Ruslan | May 2017
    Abstract
    The dollar /manat (AZN) spot exchange rate specifies how much one currency, the US dollar (USD), is currently worth in terms of the other, the manat . On the first of February 2017, the exchange rate of the national currency of Azerbaijan, the manat, hit a new record low; namely, 1 USD was exchanged for 1.92 AZN. Illegal black markets and psychological factors such as a lack of publicly available information and confidence about the real financial situation were the most severe underlying causes, coupled with the ineffectiveness of the implemented monetary, fiscal and exchange rate policies. Overall, the Monetary Authority of the Central Bank of the Republic of Azerbaijan (CBAR) lost its credibility abruptly in financial markets. However, it is noteworthy that the national currency of Azerbaijan has been gaining weight in its value recently. An 11.4% increase against the US dollar1 has been observed; that is to say, 1 USD now equals 1.70 AZN. A strict monetary policy on the part of the Central Bank of the Republic of Azerbaijan had an impact on market demand and led to an "Expensive Manat"�. A shrinking of the manat base through deposits and bond auctions paved the way for less manat in circulation, which led to a decreased demand for foreign currency. An expansive monetary policy for foreign currencies and restrictions on cash payments for businesses were the main reasons for the manat's consequent appreciation. As a result, the national currency of Azerbaijan, the manat, advanced against USD to the level of 11.4% in February-April 2017.
    Citation
    Khankishiyev, Ruslan. 2017. The Currency Market in Azerbaijan: Realities, Volatility and Perspectives. © Center for Economic and Social Development. http://hdl.handle.net/11540/7033.
    Keywords
    ADB
    Project finance
    Development plans
    Strategic planning
    Business Financing
    Investment Requirements
    Insurance Companies
    International Monetary Relations
    International Financial Market
    Exchange Rate
    Development
    Finance
    Development Challenges
    Development Issues
    Development Problems
    Microenterprises Finance
    Commercial Finance Companies
    Enterprise Financing
    Financial Analysis
    Banking Finance And Investment
    Insurers
    Insurance stocks
    Insurance holding companies
    Insurance carriers
    Insurance agencies
    Business subsidies
    Investment companies
    International banks and banking
    Stock exchanges
    Grants
    Loans
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    Citable URI
    http://hdl.handle.net/11540/7033
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    CESD_Paper_Currency_Market_Azerbaijan_2017.pdf (745.1Kb)
    Author
    Khankishiyev, Ruslan
    Theme
    Development
    Finance
     
    Copyright 2016-2020 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2020 Asian Development Bank Institute, except as explicitly marked otherwise