Manat getting cheaper again

Manat has ceded by 0,016 more points: today’s official exchange rate of the US dollar to Manat makes AZN1,7867 / US$1, whereas last week it totaled AZN1,7707/US$1.

The reason for the currency drop this time could be the Azerbaijani Central Bank’s report on the upcoming transition to a floating exchange rate and abolition of the existing 4% national currency exchange corridor. The precise time of transition to a floating exchange rate is unknown yet.

Toghrul Mashalli, an expert-economist, explained that this would allow the banks to buy and sell the currency at the preferable rate, proceeding from their own needs for currency: “The banks buy currency from the Central Bank and the State Oil Fund. Earlier, they could raise or lower the value within the 4%-range. In theory, lifting of limit should reduce a temptation to trade on the black market, decrease the inflation rate and make it predictable. However, there is another problem – the Central Bank has set the limit on dollar sales for banks, in other words, they are still not enough for everyone and the Manat will be getting cheaper anyway.”

• The Manat depreciated by about 13% over the last year.