Azerbaijan faces shortage of foreign currencies

Since the end of last week, Azerbaijan faces a shortage of US dollars and euros. The demand for foreign currencies has risen sharply against the background of falling oil prices, a sharp depreciation of Russian rouble and Turkish lira, and the people's anticipation of the new depreciation of national currency increases. The central bank of Azerbaijan declares no grounds for concern and assures that it controls the situation.

On August 21, most foreign exchange offices and many Azerbaijani banks stopped selling US dollars and euros. That has occurred after on August 20, some foreign exchange offices raised the exchange rate and started to sell 1 US dollar against 1.07 manats (on August 20, the official rate was 1.0486 manats for 1 US dollar).

The market has responded to the situation by the fact that on Friday, a lot of foreign exchange offices either stopped selling foreign currencies or working at all. People formed lines to the foreign exchange offices where it was still possible to buy foreign currencies.

According to Gubad Ibadoglu, the head of the Economic Research Centre, "manat which is controlled by administrative methods will continue to be under pressure in the current domestic economic and international environment, in conditions of the decline in the foreign currency reserves of the country."

Natiq Jafarli, Executive Secretary of the Movement "Republican Alternative", believes that the Azerbaijani authorities will try to prevent depreciation, at least until the parliamentary elections to be held in early November 2015. Meanwhile, according to Natiq Jafarli, the economy of Azerbaijan heavily depends on oil prices.

Full text of the article is available on the Russian page of 24/7 Internet agency ‘Caucasian Knot’.