Azerbaijani National Currency: Is the Current Status Quo Sustainable?
Development, Center for Economic and Social | October 2018
Currently, in Azerbaijan and the Caucasus, the situation in the economies of the region is quite variable. On the other side of the ocean, the US Federal Reverse System has been continuously raising the key interest rate. In Russia, the ruble depreciated due to existing and probable sanctions, in Turkey, economic and political circumstances have led to the 40% loss of the lira’s value (and this figure is expected to further increase by the end of the year), and the withdrawal of the US from the Iran Nuclear Deal with replaced sanctions has caused more aggravation to the socio-economic situation and rapid deprecation of the Iranian rial in the southern neighbor of Azerbaijan. The so-called trade wars and new processes led by the current US government form serious risks for globalization and liberal trade. At the moment, the most thought-provoking issues for ordinary Azerbaijani citizens are the questions: with a view to the above-listed developments, what awaits the manat now and what is the level of risk for the exchange rate? Although at first glance there is an impression that Azerbaijan’s currency exchange rate takes shape independent of these processes described above, on deeper exploration it is apparent that this is not the truth. For this reason, this topic has been widely and constantly discussed. Thereby, this article’s subject covers what the present conditions for the Azerbaijani manat in reality are. In order to find answers for these questions, this article will analyze internal and external factors affecting the national exchange rate, new challenges emerging from current economic changes and both negative and positive aspects of the current exchange rate policy. Lastly, recommendations are made in order to ensure the flexibility of exchange policy and increase the sustainability of the economy against foreign fluctuations.
CitationDevelopment, Center for Economic and Social. 2018. Azerbaijani National Currency: Is the Current Status Quo Sustainable?. © Center for Economic and Social Development. http://hdl.handle.net/11540/8881.
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