Azerbaijan news

Can the dollar rise sharply in Azerbaijan?

The US Federal Reserve raised the discount rate by 75 basis points to 1.50-1.75 percent, the highest increase since 1994.

The statement came from MP Vugar Bayramov, a member of the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship.

He said Fed Chairman Jerome Powell did not rule out another rate hike next month.

“The Fed seems determined to raise interest rates to control inflation,” he said. Experts say the discount rate will increase by 175 basis points to 3.4 percent by the end of the year. Although the Fed is targeting 2 percent inflation this year, the 12-month price increase rose to 6.3 percent in April. This is the highest inflation rate in the United States in the last 40 years. On the other hand, growth in US GDP was 1.7 percent against the forecast of 2.8 percent. All this has forced the Fed to raise sharply. Stock exchanges reacted before the Fed raised interest rates, even after reports of a rate hike. Of course, the most frequently asked question was traditional: will the dollar rise sharply in the world market?

The dollar has already strengthened against most basket currencies. Last week, the “recovering” European currency fell again against the dollar, losing 1 euro to $ 1.04. Although most major currencies are depreciating against the dollar, there is activity on US stock exchanges.

The dollar has already strengthened against most basket currencies. Last week, the “recovering” European currency fell again against the dollar, losing 1 euro to $ 1.04. Although most major currencies are depreciating against the dollar, there is activity on US stock exchanges.

He added that the main economic factors affecting the exchange rate of the manat are the amount of currency entering the country, as well as the amount of currency auctioned by the State Oil Fund:

“A significant part of the demand for foreign currency is met by the Oil Fund. From this point of view, the amount of funds put up for auction by the Oil Fund is very important in meeting the demand for dollars. This, of course, is important in terms of the manat exchange rate. Of course, changes in the exchange rates of national currencies in our foreign trade partners are also one of the economic factors. Along with all this, in practice, the exchange rate of the manat depends directly on the decision of the Central Bank of Azerbaijan. The Central Bank retains the ability to directly intervene in the process. Therefore, how the exchange rate of the manat will change will directly depend on the position of the Central Bank of Azerbaijan.

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