Azernews.Az

By Sara Israfilbayova

The Central Bank of Azerbaijan (CBA) does not rule out the possibility of further strengthening of the manat rate, Chairman of the CBA Elman Rustamov told reporters during the opening ceremony of the new head office of Ziraat Bank in Baku on October 31.

“Today we see that the manat rate is going towards strengthening, because the balance of payments is very good, oil prices are favorable,” said Rustamov.

The current account surplus of the balance of payments totaled $785.59 million in the first half of 2017. Until the end of this year, according to the expectations of the government, the current account surplus will be $1.9 billion, while by 2021 the current account surplus will reach $ 5.45 billion.

He went on to say that the CBA does not intend to give up the floating exchange rate of manat, adding that this regime has proved its effectiveness.

“Azerbaijan plans to constantly use the floating exchange rate regime of the manat. In general, this is required by both the economic realities of the country and international experience. Many countries are now preparing to switch to a floating exchange rate regime,” said the chairman, adding that “The floating exchange rate of manat is the most effective way for maintaining the exchange rate of the national currency and ensuring its stability against negative factors.”

Rustamov also noted that currently, the exchange rate of manat varies freely and does not have a certain corridor within which it could vary.

The manat rate fully operates in floating regime and depends on a number of macroeconomic and external factors, such as the cost of oil, the balance of payments, he added.

The Azerbaijani government switched to the floating manat regime on December 21, 2015. The exchange rate of Azerbaijan’s national currency, the manat, against the U.S. dollar has strengthened by almost four percent since the beginning of 2017, and the exchange rate was set at 1.7002 as for October 31.

Further, addressing the ceremony he added that relations between Azerbaijan and Turkey are at the highest level and added that the relations between the two countries, has always been close to Azerbaijan, including the most difficult periods for the country.

Ziraat Bank in development country’s financial sector

Commenting on the newly opened Ziraat Bank, Rustamov noted that the bank will play an important role in transition of Azerbaijan to new economic model.

Speaking at the event, Turkish Economy Minister Nihat Zeybekci stressed that Ziraat Bank Finance Group will take a very important place in the economic relations between Turkey and Azerbaijan.

Turkish entrepreneurs could receive a loan from their own bank, and this is very important, according to Zeybekci.

Touching upon customs duty the minister mentioned that Turkey hopes to introduce a zero rate of customs duty with Azerbaijan in 2018 for the supply of goods. Trade turnover between the countries amounted to $1.96 billion in January-September, more than $1 billion of which falls on exports to this country.

He explained that this is stipulated by the agreement on preferential trade, which the countries plan to sign.

Last week Turkey freed goods imported from the Nakhchivan Autonomous Republic from customs duties. So goods produced annually in Nakhchivan worth $100 million will be imported to Turkey without paying import duties, in accordance with the decision of the Turkish government.

Ziraat Bank CEO Huseyin Aydin, taking his turn, stressed that Ziraat Bank will contribute to the development of relations between two brotherly countries – Turkey and Azerbaijan.

He noted that Ziraat Bank came to Azerbaijan to help the development of the country’s financial sector.

“With the growing share of Ziraat Bank in the local market, we want to contribute to the development of relations between the two countries,” Aydin said.

He pointed out that Ziraat Bank Azerbaijan is a very important part of the Ziraat Finance Group.

A subsidiary of Turkey’s Ziraat Bank has been operating in Azerbaijan since 2015. The bank’s shareholders are: Ziraat Bank (99.98 percent), Ziraat Insurance (0.01 percent) and Ziraat Securities (0.01 percent). Currently, the bank has one branch and head office in Baku.

Operating since 1863, the state Ziraat Bank is the largest bank in Turkey. Outside of Turkey, the bank’s subsidiaries operate in Germany, Bosnia and Herzegovina, Russia, Kazakhstan, Turkmenistan and Uzbekistan. Ziraat Bank also has representative offices in Great Britain, the U.S., Bulgaria, Georgia, Iraq, Northern Cyprus, Greece, Saudi Arabia and Iran.

Ziraat Bank has been present on the Azerbaijani banking market since 1995 as one of the co-founders of Azer Turk Bank OJSC, where currently the Turkish bank owns 12.37 percent.

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