The Saturday Syndrome: Roots of mistrust toward the exchange rates in Azerbaijan

Abstract

“A New Manat depreciation” panic affected everyone in the country, starting from ordinary citizens to the government officials, businessmen and bank managers. The public panic happened despite the fact that around ten days ago, the head of the Central Bank announced “The currency market has been stabilized, manat has found its equilibrium in the market” [Apa.az, 19.08.2017]. Following the raising public concerns, the Central Bank presented its explanation: the final day of September coincides with Saturday and official reporting should be completed by the end of the month. In an ordinary cases, this statement should have caused public satisfaction, and the panic should have been ended. Despite this public statement by the Central Bank, for the last three days, the demand for the foreign currency in the local market has dramatically increased. This phenomenon indicates to the high sensitivity of the currency exchange market.