Weekly intervention cost of Central Bank of Azerbaijan: $ 1.27 billion US

Weekly intervention cost of Central Bank of Azerbaijan: $ 1.27 billion US

Central Bank of Azerbaijan (CBA) says that US currency is in feverish demand in the country because of Russia. According to CBA, demand for US dollars increased in Azerbaijan starting from mid-December under the influence of psychological factors due to sudden depreciation of Russian currency, as ABC news agency reports. “To maintain stability of the national currency CBA set out $1.127 billion for sale”, – CBA underlines.
“Additional reduction of US dollar-denominated currency reserves was associated with decrease in exchange rate of Euro and GBP (which are also in CBA’s currency basket) to US dollar”, – CBA says.
As a result, by January 1, 2015 currency reserves of CBA were estimated at the level of $1 3.758 billion.

Caused by oil price decline in the world market, Central Bank’s intervention costs have decreased since August 2014 in Azerbaijan- Center for Economic and Social Development (CESD) reports. According to the official data of Central Bank of Azerbaijan (CBA), which published on January 08 2015, decline has been observed in both total reserves and currency reserves. CESD underlines that CBA has already stopped dollar sterilization due to decline in the country’s oil income. Alongside that, low oil price will push the CBAR to extend local currency sterilization in up-coming months of 2015. CBA’s currency reserves decreased from $ 14, 549 billion US in August, 2014 to $ 13,210 billion US in December, 2014. This means that CBA’s currency reserves declined by $ 1.339 billion US between August and December, 2014. Much more decline are expected in January, 2015 due to high pressure of USD over AZN.

© CESD, 2015

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