USD exchange rate may be reduced to 1,44 AZN in Azerbaijan - OPINION

Fall of national currency weakens positions of Azerbaijan compared to major trading partners

Baku. 2 May. REPORT.AZ/ During this year, Azerbaijan's national currency is expected to strengthen before US-dollars.

Report informs, in comparison with national currencies of the countries, which are major trading partners of Azerbaijan, at present, AZN is in a weak position.

Notably, USD exchange rate in Russia, one of major trading partners, fell by 25,6% from highest level in 2016 - 86 RUB/USD and made 64 RUR. TRY strengthened by 9% and fell from the peak (3,07 TRY/USD). In Azerbaijan, USD exchange rate strengthened by 8,4% from maximum level (1,6456 AZN/USD) and fell to 1,5072 AZN/USD. It reduced real effective rate of AZN. Decrease in real effective rate is accompanied by decline in the purchasing power. Thus, as price of goods imported from trade partners increase equivalent to USD due to strengthening of national currencies in these countries, weakness of AZN exchange rate than USD causes increase in prices of imported goods to AZN equivalent. In turn, it leads to a weakening of the purchasing power of the population.

Analytical Group of Report News Agency considers that strengthening of AZN by 5% compared to USD on the background of current global economic conjuncture, namely, decline of the exchange rate to 1,44 AZN/USD will led to economic recovery as well as increase customs and tax revenues. In this sense, the Central Bank of Azerbaijan Republic (CBAR) is expected to take a more urgent step. 

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