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CBA ends panic among population over currency fluctuations

8 April 2015 16:53 (UTC+04:00)
CBA ends panic among population over currency fluctuations

By Gulgiz Dadashova

The Central Bank of Azerbaijan announced that fluctuations in the rate of the national currency manat are common to the regime of managed floating exchange rate.

“The rate of the manat is formed on the basis of a basket that includes the euro and the USD. This means that daily changes in the ratio of rate of the euro and the dollar partially affect the rate of the manat against the USD,” the CBA said in its message after rumors broke out in relation to an expected second wave of the manat devolution.

Over the past two days the dollar rate against the manat rose by 0.29 percent in Azerbaijan, from 1.0487 manats on April 6 to 1.0517 manats on April 8, while the euro fell against the national currency by 1.06 percent - from 1.1521 manats to 1.1399 manats.

The energy rich nation’s central bank put an end to the dollar peg for the manat in February, which system had held since mid-2011. The manat weakened by 33.5 percent against the dollar, and by 30 percent against the euro last month.

The Bank explained that in certain days the manat can rise in value and in others - become cheaper, in relation to the dollar. “Depreciation of the euro against the dollar has been observed in the last two days on the international currency market, which resulted in mild changes in the dollar/manat rate. In general, these changes are common to the managed floating exchange rate,” the message read.

The Central Bank further noted that due to the fact that the euro rate against the USD in the long term is associated to oil prices, the exchange rate regime of the CBA also takes into account long-term trends in oil prices.

WTI for May delivery fell 92 cents to $53.06 a barrel in electronic trading on the New York Mercantile Exchange at 2:36 p.m. Singapore time. Brent lost 56 cents to $58.54 on the London-based ICE Futures Europe exchange.

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Follow Gulgiz Dadashova on Twitter: @GulgizD

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