The Azerbaijani manat’s devaluation: what are next steps?

The Azerbaijani manat’s devaluation: what are next steps?

On December 21, the Central Bank of Azerbaijan abandoned its dollar peg, allowing Azerbaijani Manat (AZN) to nose-dive by almost a half.

After the Central Bank relinquishing control of its exchange rate, the quoted exchange rate was announced 1.55 against US dollar. It is the Azerbaijani Manat’s weakest record over the last 20 years.

Azerbaijan – an economy rich in energy in the post-Soviet era – has enjoyed impressive economic growth and stability over the past decade. During the last decade, the Azerbaijani Manat versus the US dollar rate exchange was 0.7850 AZN = 1 USD. In the February 2015, after the first devaluation, the rate exchange was 1.05 AZN = 1 USD. The sharp decline in the oil prices has significantly affected the oil revenues and inflow of the foreign currency…

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