Azerbaijan facing yet another devaluation of the national currency?

Five years after the disastrous 2015 devaluation of the national currency of Azerbaijan, the country has again started talking about another impending nose dive for the manat.

And a recent statement of the head of the central bank refuting these rumors has only added fuel to the fire.

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Chairman of the Board of the Central Bank of Azerbaijan Elman Rustamov in an interview with Report called statements about the inevitable devaluation in the country “empty talk.”

This seemingly soothing opinion of the chief banker of the republic only strengthened the opinion of experts about impending ‘black days’ for the manat.

“Elman Rustamov knows very well that people understand his statements about devaluation to the contrary. For this reason, he delivers a sublimative message with his smile during an interview”, one of the leaders of the opposition Republican Alternative party Natik Jafarli wrote on his Facebook page.

Jafarli recalled that in 2015, just four days before the devaluation was announced, Elman Rustamov also spoke publicly about the impossibility of such an event occuring.

Until 2015, the Azerbaijani manat was for a long time considered one of the most successful currencies in the post-Soviet space, and 1 US dollar cost only 0.78 manat. But in 2015, the country’s government devalued the currency twice, as a result of which the cost of 1 US dollar increased to 1.70 manat, to where it remains approximately today.

The inevitability of the devaluation of the manat on his Facebook page was justified by the leader of the Republican Alternative, former political prisoner Ilgar Mammadov.

“It is already possible to speak more specifically about the likelihood of devaluation. The published draft of the country’s state budget for 2021 allows us to do this.

On August 24, 2018, the President approved a medium-term and long-term strategy for managing external debt, and according to that document, in 2020 and 2021, it is necessary to spend $1.2 billion to pay off foreign debts.

In the budgets of 2020 and 2021, 1.6 billion and 2.2 billion manat were allocated for these purposes, respectively.

It is clear that in 2020 the government needed 1.6 billion manat to pay $1.2 billion, but if in 2021 it needs an amount of 2.2 billion manat for the same purpose, it turns out that the manat will become cheaper.

Now we need to hear an explanation from the government of this fact. Either the strategy approved in 2018 is not being implemented, or it is being implemented in this way (for example, some payments of the current year were postponed to the next), or devaluation is expected. The government must clearly answer the question: why is it required to pay the same amount in dollars with more manat?”, he asked.