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Report: Central Bank of Azerbaijan may reduce exchange rate margin

It will prevent sharp fluctuations of exchange rate on cash currency market

Baku. 11 April.REPORT.AZ/ +/-4%- margin, which has been defined by the Central Bank of Azerbaijan Republic (CBAR) for the commercial banks on cash transactions may be changed again.

The Analytical Group of Report News Agency considers that current situation causes sharp fluctuations in the currency market. 1,45-1,57 AZN/USD range change (8%) of cash dollar purchase rate at the cash market  as a result of the CBAR's decisions in a day in the first days of April can be brought as an example.

Notably, on the first day of the last week, on April 4, the Central Bank announced manat intervention for the first time, after launching regular currency auctions. The reason for purchase of US-dollars by the Central Bank was related with a rapid strengthening of the national currency. The decision of the CBA made an impact in a short time on the market of cash currency and US-dollar began to rise sharply. On Thursday, April 7, the Central Bank has organized again the auction in order for dollar intervention. And this time US-dollar exchange rate within a few hours reduced by 4 percentage points or 2.5% - from 1.57 to 1,53 AZN/USD.

The Analytical Group of Report News Agency considers that the CBAR may return to the previous margin indicator (+/- 2%) to avoid sharp fluctuations of exchange rates: 'It can prevent sharp fluctuations of exchange rate on cash market'.

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