For some time, information and rumors have been circulating that there will be a devaluation in Azerbaijan and that the price of the dollar will increase. Finally, such an exciting news filled the media and social networks 2 days ago.
Publika.az With reference to Musavat.com, it is reported that many banks have also limited the sale of dollars for 2 days.
It is true that the Central Bank declared that there is no restriction on the sale of dollars, but many banks did not sell dollars to citizens on August 20-21 or gave more than $100.
Is there any reason for this hype? Are there possibilities of dollar appreciation and devaluation in Azerbaijan?
Economist Natig Jafarli said that devaluation in Azerbaijan can be by administrative decision. This is not related to the events taking place in the market: “The exchange rate in Azerbaijan is regulated administratively. If the Central Bank and the government decide about it, then it will be. The probability of this is high because we are in the fixed exchange rate regime for the 9th year. The rate does not change. It can’t stay that way for long. After some time, some changes will be needed. Also, because oil production and oil revenues in Azerbaijan, the price of oil is also decreasing. I don’t believe it will happen this year. “Probably, a decision can be made regarding the upcoming devaluation.”
Economist-expert Rashad Hasanov says that the conclusions reached as a result of the analysis of the current economic environment, indicators of the country’s import-export operations, the structure of the balance of payments, elements of monetary policy, fiscal approaches and social aspects, especially risks, is that today in the financial market of Azerbaijan there is no pressure for devaluation. If there is a shortage of supply in the financial market today, it can happen for short-term technical reasons: “There is no factor that determines this shortage for the long-term period. The currency entering the country is much more than the currency leaving the country. Under these conditions, economic and monetary aspects of devaluation are not visible. There is no pressure in this direction. But it should also be taken into account that the exchange rate of the manat in Azerbaijan is formed by diktat. If the government takes a decision with some different arguments and reasoning, this is also possible. That is, the indicator may change as dictated. Our observations show that the government does not have any savings. But sometimes there are opportunities for such a decision. In fact, no real reason determines devaluation in Azerbaijan. The government will not make a decision in this direction for the time being, taking into account the inflationary measures, social burden, citizens and business that will be created by the devaluation. Is devaluation expected at least in 2024?
The expert also spoke about banks limiting the sale of dollars: “Similar cases have happened many times. But since 2017, it is actually a stable exchange rate in the country. Maybe because the time between auctions is getting longer for some reason, banks have difficulty predicting and don’t buy as much currency from the auction as they should, resulting in such a shortage.
The Azerbaijani market is very small. Even if a large company enters the market, buys currency and fulfills some debt obligations, it can create a serious currency shortage.”
The expert drew attention to the banks’ interest in selling old dollars: “The banks have old dollars in their vaults. When you give it to customers, there is a problem, they don’t want to take it. Because in some cases, the banks had a problem with the customer when they took the old currency. There is a stereotype about it. The citizen is therefore not inclined to buy the old dollar.
The fact is that the costs associated with collecting the old dollar and delivering it to the federal reserve system create a certain difficulty for banks. From that point of view, banks are trying to melt old dollars in the market so that they don’t have to face additional costs and commissions.
Azer Badamov, who was the deputy of the 6th convocation of the Milli Majlis, says that recently the news that banks avoid selling dollars and that the manat will be devalued is unfounded. There are certain rules for selling dollars.
“In these rules, the limit for the sale of dollars to each person is determined. Banks also sell according to those rules. Perhaps the demand for dollars is more than ever lately. I think this is also related to the summer season. Because during these months, everyone tries to go on vacation and relax abroad. In this regard, the demand for dollars is expected to increase temporarily. But there is no basis for the news that the manat will be devalued. We mainly sell our energy resources in dollars. “The prices of energy resources in the international markets remain high.”
It should be noted that the employee of Musavat.com visited several banks and tried to learn the real picture. “KapitalBank” informed that if a person did not buy dollars during the year, 11 thousand 750 dollars can be sold to him during the day. “Expressbank” said that 20,000 manat dollars can be sold to a person.
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