CESD Research Brief: Should we expect a change in the rate of Azerbaijani manat in context of high demand for US dollar?

Abstract

In January-February of 2019, activity in foreign exchange markets has further escalated. According to the information provided by the State Oil Fund of Azerbaijan (SOFAZ), during the corresponding period 951 million US dollars were sold, including 634.9 million in January and 316.2 million in February. This is 47.2% higher than the same period of the previous year [see diagram 1]. It should be noted that since the second half of 2016, SOFAZ is the only organization offering foreign currency in auctions organized by the Central Bank. From the approved forecast budget of the Fund for 2019, it is clear that the entity will spend about 11.6 billion manat, which is about 6.8 billion US dollars. In other words, the Fund can sell foreign currency worth 568 million USD on average per month.