The unexpected revenge of manat in Azerbaijan: what is going on in currency markets?

Abstract

The rapid appreciation of the national currency manat over recent days has created a shock effect across the local population. Everyone, including the participants of the currency markets are trying to understand the causes driving the existing developments in the value of currencies. The current situation has even left local economists puzzled, who are struggling to put forward any explanation. As it stands, the questions such as “to what extent can manat gain value?”, “what causes the existing developments?”, “what is the degree of administrative intervention to the processes?” and etc. remain unanswered. Even the officials in government and Central Bank have not provided any explanation. Thus, in the following chapters, we will attempt to answer a number of the pressing questions briefly.