The Currency Market in Azerbaijan: Realities, Volatility and Perspectives

The Currency Market in Azerbaijan: Realities, Volatility and Perspectives

The dollar /manat spot exchange rate specifies how much one currency, the US dollar, is currently worth in terms of the other, the manat . On the first of February 2017, the exchange rate of the national currency of Azerbaijan, the manat, hit a new record low; namely, 1 dollar was exchanged for 1.92 manat. Illegal black markets and psychological factors such as a lack of publicly available information and confidence about the real financial situation were the most severe underlying causes, coupled with the ineffectiveness of the implemented monetary, fiscal and exchange rate policies. Overall, the Monetary Authority of the Central Bank of the Republic of Azerbaijan lost its credibility abruptly in financial markets.

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