Report: Expected rise of Fed interest rate will have minimum effect on Azerbaijani manat

Baku. 15 February. REPORT.AZ/ Expected decision of US Federal Reserve (Fed) to raise interest rate will have minimum negative effect on currencies of developing countries, including Azerbaijan.

Analytical Group of Report believes capital outflow from developing countries will hold on minimum level due to high interest paid for US-dollar in these countries. As a consequence, pressure over national currencies of developing economies will remain on low level. Despite this, rise of interests for US dollar deposits can be brought to the agenda in Azerbaijan. The reason is that in coming years Fed’s interest rate will approach to the interest paid for US dollar in Azerbaijan. In such case local and foreign investors may prefer to invest into US securities.

Analytical Group of Report observes, US dollar decline in developing countries, despite its strengthening in global currency market: “This indicates establishment of opposite correlation between US dollar and currencies of developing countries. Thus, whereas US dollar recently gained ground by 3% against Euro. it declined by 8% against Turkish lira, 7.5% against Russian ruble, 10% against Azerbaijani manat. Investors gain significant profit from high percentages by investing into currencies of such countries”.

Analytical Group says, oil price as main factor for manat, which is expected to keep at average 55 USD/barrel during 2017.