Dollar to reach 1,80 AZN/USD - the economy will get a second wind - ANALYSIS

Dollar to reach 1,80 AZN/USD - the economy will get a second wind - ANALYSIS
Report: Sustainable development in the country is possible only after the recession will bottom

Baku. 26 August. REPORT.AZ/ Official exchange rate of US dollar in Azerbaijan may exceed 1,80 AZN/USD by the end of the year.

Analytical group of Report believes, if the current situation on the currency market not changes, soft devaluation will continue.

Notably, approximately 18 weeks left before the end of the year. Experience of recent months shows that the Central Bank of Azerbaijan (CBAR) increases dollar by 0.01 manat on a weekly basis. This suggests that if by the end of the year CBAR will not change its policy against the background of serious volatility in the global market, the official rate will rise to at least 1,80 AZN/USD. In this case, selling rate of cash dollar by commercial banks could reach 1,87 AZN/USD (based on a 4% margin).

Notably, after the January 8 when dollar in exchange offices reached 1,87 AZN/USD CBAR introduced a 4% margin in the sale of currency (previously 2%).

Report analysts note that, although depreciation of manat will have positive impact on exports and tourism, but will lead to higher prices for imported goods.On the other hand, it will be an additional incentive for local production. After a pair of rate AZN/USD will reach the market balance, the currency market will stabilize in the medium term, which will lead to the elimination of the deficit. To do this, it is necessary to reduce the negative balance of payments and align the volume of transfers in the budget to foreign trade. The soft devaluation of the manat will ensure the adaptation of the population to the new global economic realities.

Analytical group of Report forecasts continuation of a soft devaluation of the manat, and the process in the next year. Notably, national currencies of neighboring Russia and Turkey have depreciated against dollar 11 times over the past 18 years. Repeated severe financial crisis led to the devaluation in these countries.

"To ensure global economic growth, including sustainable economic development in Azerbaijan, recession should reach the bottom, national currencies stabilize, and only after that it is possible to achieve economic development in new economic realities. This process is expected to extend over 3-5 years," noted Report analysts.

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