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Manat falls - prices rise?

27 February 2015 09:58 (UTC+04:00)
Manat falls - prices rise?

By Nigar Orujova

After a sharp devaluation of the manat on February 21 led to an overnight rise of prices in the local market the government has worked to set in place a series of measures to protect customers and control inflation.

Azerbaijan Central Bank set the manat at 1.05 against the USD, compared to 0.78 earlier. The move aims to strengthen “international competitiveness,” amid aggravated pressure on the country’s finances due to low oil prices.

Such measures aim to prevent any artificial increase in prices in the consumer market, the Economy and Industry Ministry reported.

The ministry insisted that its priority is to stabilize the market and protect prices for basic foodstuffs and medicines. The ministry has also prevented a price increase on flour.

The State Service for Antimonopoly Policy and Consumer Protection warns that direct measures will be put in place against those business entities that seek to artificially raise prices.

The ministry advised the population to remain vigilant when shopping.

Officials called on all residents to notify the authorities should they witness over-prizing practices. A hotline has already been set in place by the government to that effect - people should call 195-2 - the call center of the Economy Ministry, or the Service for Antimonopoly Policy and Consumer Protection - (+99412) 498-15-01, 498-15-04.

Salim Muslimov, the labor and social protection of population minister, said earlier, that his ministry will continue to monitor markets and assess its strategies accordingly.

Speaking to the press he reaffirmed that the authorities will continue to meet social payments in a timely manner. "There will be no delays,” he said.

He added, "In this situation, one can only talk about the reaction of the social protection system to the change in the market prices."

“We are working on it,” insisted Muslimov, adding that since February 23, all relevant state departments had been monitoring the situation.

“Unfortunately, and due to ongoing difficulties in the oil market world currencies are suffering. Speculation has become rampant," he noted. “In such cases, the antimonopoly structures should strengthen its administrative measures. In our case, the economy ministry deals with this, and, according to the available information, it [the ministry] conducts enhanced work in this direction.”

Muslimov also said his ministry will send its monitoring results to the government, and then take appropriate action.

The State Social Protection Fund has also reported it will consider the possible growth of the consumer price index when calculating pensions.

Azerbaijan’s manat had been stable at just over 0.78 per dollar since mid-2011. The economy of Azerbaijan - the biggest economy in the South Caucasus - has slowed down as oil prices fell 45 percent from last year’s peak.

The country, which relies on hydrocarbons for more than 90 percent of its exports and has built its state budget around the petrodollars - 65 percent - was forced to devaluate the national currency.

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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar

Follow us on Twitter @AzerNewsAz

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