As it is known, regional currencies continue to lose value in the last month. According to interest indicators, the Turkish lira is in the first place with 18.7%. For this reason, the fight against inflation in the brotherly country remains the main goal in relation to the current situation. The Russian ruble fell by 5.9 percent, the Georgian lari by 3.1 percent, and the Kazakh tenge by 1.2 percent. The strengthening of the US currency in the global market does not go unnoticed by the regional currencies. The share of the US dollar in international settlements increased to 42.71%, which is the highest level in the last 2 years. Due to the depreciation of regional currencies, price increases are also observed in consumer markets.
About the effects of events in the currency markets of neighboring countries on the exchange rate of the manat Publika.az-a talking economist expert Rashad Hasanov said that the value of the currencies of neighboring countries is not the main factor in the policy of forming the Azerbaijani exchange rate under the current conditions.
“At the moment, there are several serious symptoms in the direction of continuing the policy of the stable exchange rate of the Azerbaijani manat. In the socio-economic development strategy for 2022-2026, as well as in the draft of the state budget for those years, the standard of the manat is taken as 1.70 Azn, and the messages given by the central bank within today’s conditions also confirm it. shows that efforts will be made to continue this exchange rate policy. Because the main issue is to neutralize the inflationary pressures in the current situation. “A serious tool that the local government can use is to keep the exchange rate of the manat stable against the dollar,” he said.
The economist noted that inflationary pressures are above the norm, and this year it is highly likely to be double-digit.
“For this reason, I think that the loss of the exchange rate weakens the positions of regional countries, especially Azerbaijan, in relation to their foreign partners. In particular, it is manifested in the aspect of export, export of services, competitiveness of local products in both domestic and foreign markets. But despite this, it neutralizes the risks that have arisen in the direction of inflation to a certain extent. The government is currently paying more attention to social aspects, especially taking into account factors such as weak diversification of the non-oil economy and weak development potential. In this regard, looking at the pros and cons, the government will continue this exchange rate policy with the support of the oil price within the existing conditions.
Results in terms of impact on Azerbaijan’s export potential
“Since our exports are mostly energy, electric power, mining industry, gold, oil products formed on the basis of vertical diversification, agricultural products, no serious effects of the exchange rate are observed here. The export structure is so simple and consists of products available in the market that even if the government moderates the exchange rate, it will not have any significant impact.
But if he tries to switch to “floating stomach mode”, then we can face a completely different situation. Since oil is expensive and there is a surplus in the country’s balance of payments and trade balance, I think that the manat may even strengthen, which is one of the most risky scenarios,” concluded R. Hasanov.
