Growth in demand for foreign currency in Azerbaijan temporary - Central Bank

By Trend

The Central Bank of Azerbaijan (CBA) sold $142.2 million to banks at the foreign exchange auction held with the participation of the State Oil Fund of Azerbaijan (SOFAZ) on January 12, 2021, Trend reports citing the country's CBA.

The demand from banks at the auction was fully met.

At the end of the auction, the weighted average rate of the manat to the dollar amounted to 1.7 AZN / USD.

According to the CBA, the expectations, formed in recent days amid the unfounded news about the drop of the manat, circulated in the press and social networks, caused a certain demand in the cash currency market, which affected the relative growth of demand at currency auctions.

“However, due to the increase in oil prices compared to 2020, the adoption of positive decisions on oil production at the recent OPEC + meeting, the launch of vaccination programs against the COVID-19 virus worldwide and significant transfers from the State Oil Fund, the opinions about the manat’s drop are unfounded. In this regard, the growing demand for cash currency is temporary and will soon subside,” noted the bank.

“At the same time, in recent days, there have been reports that banks have problems with the sale of non-cash US dollars and this is associated with foreign exchange auctions, which is also unfounded. It’s reported that currency auctions are held by the Central Bank twice a week (Tuesday and Thursday) and the requirements of banks for cash and non-cash currency at these auctions are met in full,” added the bank.

Since 2017, the exchange rate of the national currency has been stable. In 2021, ensuring stability in the foreign exchange market will also remain in the spotlight of the Central Bank of Azerbaijan.

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