Azerbaijan's currency market stable, minister says

/By AzerNews/

By Aynur Karimova

The situation on Azerbaijan's currency market has stabilized as a result of the taken measures, Finance Minister Samir Sharifov said on January 29.

"Panic, which was observed on the market in early January, subsided and as a result of the taken measures the situation has stabilized. Thus, we have moved to the floating exchange rate and the rate of the manat is falling, but it is possible that some day it will rise. From now on, the demand will depend on the supply," he noted.

He further went on to say that due to the decline in oil prices there is a certain situation in the balance of payments of Azerbaijan. When there were large foreign exchange flows, the balance of payments was almost always positive, he added.

"Today the situation has changed and our foreign exchange earnings declined, however, import needs, i.e. payments made in foreign currency not so much decreased," the minister stated. "This imbalance in the balance of payments, of course, is the reason for the depreciation of the national currency."

The minister believes that Azerbaijan has sufficient foreign exchange reserves, despite the fact that foreign exchange reserves at the disposal of the Central Bank of Azerbaijan seriously reduced and the assets of the State Oil Fund of Azerbaijan fell, but only slightly.

"It is a normal process, as the establishment of the SOFAZ was aimed at supporting the country in a difficult period and in this situation we should use resources of the Fund to stabilize and balance the situation," he added.

2015 was a difficult year for Azerbaijan and the whole world in terms of economy. Although the Azerbaijani government was able to fulfill its obligations, the country faced problems with oil revenues due to the low crude prices. The CBA was forced to devaluate the national currency - for the first time in February by around 34 percent, and for the second time - in December by 48 percent.

Sharifov went on to add that there is not an acute need for barrowings.

"At our request the International Monetary Foundation will provide some technical assistance in connection with the implementation of a series of measures in the country's economic sphere. We consider it useful to consult with international experts. It is for this reason the missions of ADB, WB and IMF are in Baku now," he said. "However, we don't have any need to attract loans urgently."

"Azerbaijan is a member of these international organizations, respectively; if necessary we can take loans from them. It is our right. We will continue cooperation with the international financial organizations in the same order, but if necessary we can also approach them for loans", Sharifov underlined.

Azerbaijan's foreign debt is only 12 percent of GDP, and the country's foreign currency reserves are almost the same level as GDP.