Report experts: Lira and ruble will increase pressure on manat

Baku. 2 November. REPORT.AZ/ Forecasted decrease in Turkish lira and Russian ruble will increase pressure on Azerbaijani manat in 2018.

Analytical Group of Report News Agency informs, downturn in the Turkish lira in late October will also continue in 2018. Notably, in early September exchange rate at 3,38 TRY/USD up by 14% to TRY 3,85/USD in late October. Nevertheless, Turkish Customs and Trade Minister Bülent Tüfenkci said today that Turkey's foreign trade deficit increased by 74.6% annually and amounted to $ 7.36 billion in October. Also, growth in oil prices and the likelihood of these levels remain a negative factor for Turkey's foreign trade balance.

Analytical Group believes, US-dollar rate will continue to rise in Turkey and can reach $ 4.20-4.50 TRY/USD in 2018.

As for Russian ruble, a few days ago, severe sanctions of US State Department against Russia's oil and gas sector that will come into force on January 29 show its results. News are coming about the problems in the second pipeline of Turkish Stream that will transport gas to Europe and North Stream-2 project. If the construction of these pipelines is not over, Russia's gas supplies to Europe will be considerably reduced. Meanwhile, the expected decline in oil prices since the second half of 2018 will result in decline of the Russian ruble rate. Analytical Group predicts that the dollar rate in Russia will be at range of 63-68 RUB/USD in 2018.

"The depreciation of both currencies will increase pressure on Azerbaijani manat. The real effective exchange rate of manat will accelerate flow of goods from these countries to Azerbaijan. Azerbaijan faced such a case with the first devaluation from the last quarter of 2014 (February 21, 2015). At that time, the real effective exchange rate increased from 130 points per annum to 153 points in January 2015. The real effective exchange rate of manat on September 1, 2017 was 92.2 points. Exceeding the rate of 100 points will increase the pressure on manat”, analysts said.