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“It is impossible to keep the manat at the current level for a long time” – a signal from the deputy

“With the current exchange rate policy of the Central Bank, the manat will continue to be 1 for many years to come dollarsIt is impossible to keep it at the level of 1.7 manats, and sooner or later it will be switched to a fully floating exchange rate regime.

This deputyeconomist scientist Ali Masimli said.

He said that when the manat goes to a freely floating exchange rate regime, the exchange rate change is inevitable: “But the point is that in the current economic conditions, there are no preconditions for the transition of the manat to a fully floating exchange rate. This issue is specific time – 2020Although it was included in the Strategic Road Map by indicating the year 20 of the Central Bank20“It is not realistic for us to switch to a fully floating exchange rate regime” in 2016 shows that what we said is reasonable.

Ali Masimli noted that devaluation is determined by a number of factors such as the state of the balance of payments, currency reserves, capital flow, the direction of the country’s foreign trade policy, the degree of activity and export opportunities, psychological nature and so on. According to him, the exchange rate of the manat mostly depends on the price of oil in the world market, as well as the amount of currency auctioned by the State Oil Fund. “In the background of global geopolitical and economic processes, the price of one barrel of crude oil in the world oil market in the first half of this year is 110 dollars organized, and now 10It’s under $0. This is 1.6 times higher than the forecast figure based on the 2022 state budget. The balance of payments is also in surplus. 12 in the foreign trade balance in the first half of this year billion A positive balance was created in excess of the dollar. Although it is unlikely that high oil prices will be long-term, according to the estimates of international financial organizations and other institutions, if nothing unusual happens, in 2022 the average price of oil in the world market in all options Azerbaijan will be higher than the level envisaged in the budget. 70s and 90s year round dollars there will be scope for price volatility between, but an average price of about $85 per year is projected. This figure is the price of oil Azerbaijan since the beginning of the critical threshold is 2 times higher than 40 dollars, there is no possibility of devaluation”.

Ali Masimli noted that devaluation is determined by a number of factors such as the state of the balance of payments, currency reserves, capital flow, the direction of the country’s foreign trade policy, the degree of activity and export opportunities, psychological nature and so on. According to him, the exchange rate of the manat mostly depends on the price of oil in the world market, as well as the amount of currency auctioned by the State Oil Fund. “In the background of global geopolitical and economic processes, in the first half of this year, the price of one barrel of crude oil in the world oil market was 110 dollars, and now 10It’s under $0. This is 1.6 times higher than the forecast figure based on the 2022 state budget. The balance of payments is also in surplus. 12 in the foreign trade balance in the first half of this year billion A positive balance was created in excess of the dollar. Although it is unlikely that high oil prices will be long-term, according to the estimates of international financial organizations and other institutions, if nothing unusual happens, in 2022 the average price of oil in the world market in all options Azerbaijan will be higher than the level envisaged in the budget. There will be scope for price fluctuations between $70 and $90 throughout the year, but an annual average price of about $85 is projected. Since this figure is 2 times higher than $40, which is considered the beginning of the critical limit for the price of oil for Azerbaijan, there is no possibility of devaluation.”

However, Ali Masimli noted that it is likely that in the next years certain decisions will be made about the transition of the manat to a freely floating exchange rate. According to him, the logical result of the current exchange rate policy in Azerbaijan is that when the situation in the financial sector reaches a critical level, devaluation will take place. “If the price of oil drops to around $40, and if it tends to decrease further, if this trend continues for a long time, then the macroeconomic situation and the situation in the balance of payments will deteriorate and devaluation will be inevitable,” the economist stressed. (moderator)

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