Report: Depreciation in CNY may cause decline in export of non-oil products from Azerbaijan to China - ANALYSIS

Baku. 17 October. REPORT.AZ/ The exchange rate of Chinese yuan (CNY) against other currencies, including USD, continues to fall amid the trade war between US and China. CNY/USD rate on Bloomberg trade platform is currently close to 6.93.

Report’s analytical group believes that by depreciating the CNY rate, China is trying to reduce impact of customs duties imposed by US on Chinese products, and deficit in foreign trade balance with the United States. 

However, China’s currency policy may also affect import and export operations with Azerbaijan. Currently, the CNY/AZM rate is 4.07, while it was 3.83 in early 2018. Depreciation of yuan rate against manat may cause decline in export of non-oil products from Azerbaijan (for instance, wine) to China.

At the same time, import from China to Azerbaijan is not expected to increase either because national currencies of the neighbor countries depreciated more than CNY. This stimulates Azerbaijan to apply to neighbor countries for import.