Currency reserves of Azerbaijan Central Bank grow first time since August 2014

Currency reserves of Azerbaijan Central Bank grow first time since August 1, 2014

The Central Bank of Azerbaijan (CBA) reports that devaluation of the national currency has finally helped to save its currency reserves from fall: in May they demonstrated growth for the first time since August 1, 2014. The CBA reports that as of 1 June 2015 its billion US currency reserves totaled $ 8.43 versus $ 8.397 billion US by 1 May, $9.47 bn by 1 April, $11.004 billion US by 1 March, $12.68 billion US by 1 February $13.758 billion US by 1 January 2015. For comparison, CBA currency reserves reached $14.996 billion US by 1 December and $15.193 billion US (absolute record) by 1 August 2014. They totaled $14.15 billion US by 1 January 2014 and $11.69 billion US by 1 January 2013. By the end of March 2015 the level of currency reserves corresponds to that of January 1, 2012 ($10.481 billion US). Growth of CBA currency reserves in May 2015 totaled $32.9 million US (+0.39%). In 2015 their decrease totals $5.327 billion US (-38.7%). Since August 1, 2014 they have fallen by $6.762 billion US (-44.5%).

CESD experts underlines that the reasons of increasing of currency reserves of CBA have not been officially announced. However, CESD predicts that there are 2 main reasons of increasing of CBA’s currency reserves. The first, CBA has started borrowing money by issuing of its securities. Borrowing money has helped CBA to increase its currency reserves in spite of the fact that the bank still continues its intervention to the money market. The second, decreasing of CBA intervention cost due to growing demand for foreign currencies. CBA has not reported how much intervention cost was in May 2015. However, according to the monitoring in the currency market demand for local currency has slightly increase last month in Azerbaijan.

© CESD, 2015

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