Azerbaijani Central Bank's task - to prevent sharp change of manat's exchange rate

The transition to the floating rate of the national currency in Azerbaijan has justified itself, the head of the Central Bank of Azerbaijan (CBA) Elman Rustamov told reporters on March 2.

“Given the current conditions, considering the situation in the global economy, this is the right decision, and it corresponds to the strategic interests of Azerbaijan,” he said.

He went on to add that the Azerbaijani manat will remain ‘floating’ until its stability is ensured.

The CBA switched to the floating rate of manat on Dec.21, as a result of which the exchange rate of dollar and euro increased by 47.6 percent and 47.9 percent and stood at 1.55 and 1.685 manats, respectively.

Rustamov further said that Azerbaijani banks receive sufficient foreign currency volume through auctions.

“Today we are holding auctions, and, as one can see, there are no other parallel processes on the market,” he said. “We have our own schedule in accordance with which we carry out the auctions.”

He said that the task of the Central Bank of Azerbaijan as the regulator is not to provide banks with foreign currency, but to prevent sharp fluctuations of the manat exchange rate.

“A revised state budget for 2016 has already been adopted, and it envisages the transfer program, which is the main channel for providing market with foreign currency,” Rustamov said.

At a plenary session on February 23 , the Azerbaijani Parliament adopted amendments to the country’s state budget for 2016.

In accordance with the amendments, the adjusted state budget revenues are expected at 16.822 billion manats (AZN), which is 15.5 percent more than the approved forecasts. Expenditures of the state budget are projected at 18.495 billion manats. The state budget deficit will amount to 1.673 billion manats.

The official exchange rate on March 2 is 1.5764 AZN/USD.

Revenues of Azerbaijan’s adjusted consolidated budget for 2016 are expected at 15.738.6 billion manats, which is 981.5 million manats, or 5.9 percent less compared to the approved budget.

Azerbaijan’s state and consolidated budget parameters were adjusted based on the oil price of $25 per barrel. (Trend.az)