Report experts: Pressure on Azerbaijani manat will increase by late 2018

Baku. 27 October. REPORT.AZ/ At a meeting of the European Central Bank (ECB) on monetary policy yesterday, the volume of stimulus reduced by two times to 30 billion euros a month ($ 35 billion), but after the decision to extend this program to be completed by late 2017, the euro exchange rate dropped by about 200 points to 1.1630 level against its main opponent. In other words, dollar's exchange rate has risen by 200 points.

Analytical Group of Report News Agency informs, the following news that will affect the two major currencies of the world will be the announcement of a new head of the Federal Reserve System (Fed) and the expected increase of discount rate in December. In case if John Taylor elected the dollar rate will further strengthen, resulting in the rate dropping to 1.14 USD/EUR. Analytical Group believes that the process of strengthening US-dollar in December will slow down and it will again gradually decline.

"Strengthening of US-dollar at this stage will not have a negative impact on manat due to high oil prices. The era of cheap dollar and expensive oil will last in the next 8-11 months. This will keep the stability of Azerbaijani manat rate. A cheap dollar and expensive oil will lead to a rapid growth of the US economy, the achievement and even exceeding the inflation target of 2%. As a result, from the second half of 2018 we should expect the Fed to raise rates higher", analysts said.

Experts of Report News Agency believe that the pressure on the Azerbaijani manat will begin to grow from the fourth quarter of 2018: “Reducing global liquidity, strengthening of US-dollar and falling oil prices will lead fall in cheapening of manat”.