BAKU/JULY 17 2021 (The Bulletin) — Commercial banks in Azerbaijan are limiting foreign currency sales to try to prevent a fall in the value of the manat currency, the Bloomberg news agency reported.
It quoted several residents of Baku who said that they had tried to change manat into US dollars at commercial banks but had been told that the Central Bank had banned it. Azerbaijani media has been reporting on currency exchange limits for much of the year.
In an emailed response to Bloomberg’s questions on the blocking of foreign currency sales, the Central Bank was quoted as denying that this was a formal policy and that it instead promoted a “liberal” currency exchange.
But the Central Bank has maintained a tight peg on the value of the manat for the past five years, ever since it was bounced into two consecutive devaluations in 2015, linked to the oil price collapse of 2014, which damaged its reputation for competence.
Both the Georgian lari and the Armenian lari lost around 15% of their value at the start of the global coronavirus pandemic, and its associated lockdowns, last year. By contrast the Azerbaijani Central Bank maintained the value of the manat at 1.6995/$1. Analysts have said, though, that the pressure to devalue has been growing.
In January 2016, shortly after devaluing the manat for the second time, the Central Bank also brought in rules which temporarily stopped currency traders from buying or selling currencies.
>>See P.8 for currency market news
ENDS
— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021
— Copyright the Central Asia & South Caucasus Bulletin 2021