Central banker rules out currency devaluation
Azerbaijan`s currency will not face a devaluation,
the country`s central banker has pledged in a statement that comes
after a reduction in the national currencies raised concerns in
numerous former Soviet republics.
Amid a severe world financial crisis, the exchange rates in a number of CIS states` currencies have fallen. Russia, Kazakhstan, Tajikistan and Armenia have already ordered their treasuries to float their national currencies. However, Azerbaijani officials have said the issue is not on the nation`s agenda. Also, Azerbaijan spends at least $150 million a month to support the stable rate of the manat.
Elman Rustamov, chairman of the National Bank of Azerbaijan (NBA) steering board said, however, that the problem of the falling rate of the national currencies in other CIS states was very serious. The governments of numerous countries have already reduced exchange rates by 30-40 percent, but the measure has failed to bring extra advantages.
"They did this just because they had to," Rustamov said in parliament on Friday. "I don`t know a country that would devaluate its national currency on its own accord.
"In Azerbaijan, elements of economic stability have formed in the background as the basis of the national currency`s stability, and there are currently no ample arguments to disrupt this stability," the central banker said.
Commenting on recent media reports alleging that the manat would experience devaluation, Rustamov called as being rumors such speculation that claimed this alarming tendency was expected after the March 18 referendum on constitutional changes. The government is currently not considering the issue of the manat`s devaluation, he said.
"The rate of the manat depends on oil prices on world markets, and we are, so far, content with its level," Rustamov added. He admitted, however, that the process of increasing conversion of money into dollars was underway throughout the Azerbaijani economy. "In fact, although the official rate of the manat remains stable, dollarization is ongoing due to psychological processes. Both [bank] deposits and cash are being converted to dollars." Further, Rustamov emphasized that in contrast to the situation in a slew of other countries, the indicators being posted by Azerbaijani banks are quite satisfactory despite the global crisis. He added that the government should provide additional assistance to the banking sector to ensure its sustainability.
Amid a severe world financial crisis, the exchange rates in a number of CIS states` currencies have fallen. Russia, Kazakhstan, Tajikistan and Armenia have already ordered their treasuries to float their national currencies. However, Azerbaijani officials have said the issue is not on the nation`s agenda. Also, Azerbaijan spends at least $150 million a month to support the stable rate of the manat.
Elman Rustamov, chairman of the National Bank of Azerbaijan (NBA) steering board said, however, that the problem of the falling rate of the national currencies in other CIS states was very serious. The governments of numerous countries have already reduced exchange rates by 30-40 percent, but the measure has failed to bring extra advantages.
"They did this just because they had to," Rustamov said in parliament on Friday. "I don`t know a country that would devaluate its national currency on its own accord.
"In Azerbaijan, elements of economic stability have formed in the background as the basis of the national currency`s stability, and there are currently no ample arguments to disrupt this stability," the central banker said.
Commenting on recent media reports alleging that the manat would experience devaluation, Rustamov called as being rumors such speculation that claimed this alarming tendency was expected after the March 18 referendum on constitutional changes. The government is currently not considering the issue of the manat`s devaluation, he said.
"The rate of the manat depends on oil prices on world markets, and we are, so far, content with its level," Rustamov added. He admitted, however, that the process of increasing conversion of money into dollars was underway throughout the Azerbaijani economy. "In fact, although the official rate of the manat remains stable, dollarization is ongoing due to psychological processes. Both [bank] deposits and cash are being converted to dollars." Further, Rustamov emphasized that in contrast to the situation in a slew of other countries, the indicators being posted by Azerbaijani banks are quite satisfactory despite the global crisis. He added that the government should provide additional assistance to the banking sector to ensure its sustainability.
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