Too early for int'l payments in Azerbaijani manat, expert says
![Too early for int'l payments in Azerbaijani manat, expert says](https://www.azernews.az/media/pictures/manat_010.jpg)
By Aynur Karimova
It is still early for Azerbaijan to move to payments in the national currency in trade with other countries, economist Farhad Amirbayov believes.
"Azerbaijan's exports mainly comprise of energy resources, and revenues are recorded in dollars. The need for payments in national currency occurs in the countries with a very broad export base, represented not only with raw materials, but also with manufactured goods, agricultural products, etc.," he noted.
The share of energy resources accounted for 86.79 percent of Azerbaijan’s total exports in January-July 2015. The country earned about $6.5 billion from the export of oil, petroleum products and natural gas in the reported period.
Amirbayov believes that first of all, Azerbaijan should undergo an economic transformation from a resource model to a more complex form.
"As long as we do not do it [this economic transformation], we will not have such a need," the expert noted.
The expert considers that payments in national currencies through the Commonwealth of Independent States will proliferate. Many countries have already expressed strong interest in increasing payments in national currencies in trade. Russia and China are among them.
As Vedomosti reported, trading in the ruble/yuan currency pair increased by four times (to 191.4 billion rubles or 18.4 billion yuans) this August compared to August 2014, which is the peak index since the start of trading in Chinese yuan in 2010.
However, expert Vugar Bayramov believes that use of national currencies in trade among the CIS member states will not rise in the short term.
“The national currencies of the CIS state are still weak for the wide use of them in mutual trade, especially following the developments being observed since mid 2014. They are not as stable as needed,” he earlier told Azernews.
Major changes are being observed in the currency market of the CIS states. The devaluation of a number of currencies and the strengthening position of the U.S. dollar as the key international payment unit prevents the organization of payments in the national currencies of the CIS counties.
“Some countries use national currencies in bilateral trade instead of the USD and euro. In some cases this is related to a lack of foreign exchange in these countries and in other – profitability of the national currencies. Central Asian states, especially, use the national currencies widely while trading with Russia, and also with each other,” he said, noting that however this does not mean that the trade within the CIS area may completely move to using national currencies in the short term.
There have been discussions to use Azerbaijan’s manat widely in mutual trade, as manat was among the highest performing currencies in the emerging market currencies.
“However the fact that Azerbaijan’s main trade partner is Europe and the EU occupies about 60 percent of country’s foreign trade, as well the ongoing Nagorno-Karabakh conflict and occupation of Azerbaijani territories by Armenia leaves little room for use of the manat in this spectrum.”
--
Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
Follow us on Twitter @AzerNewsAz