Agency Moody's: Devaluation of manat in Azerbaijan continues

Baku.19 May. REPORT.AZ/ Today Baku hosted the annual conference of the international credit rating agency Moody's.

Report informs, Moody's experts addressed at the conference on the economy of Azerbaijan and its future. At the meeting with representatives of the local banking sector held extensive discussions on the scope of the financial sector.

Forecasts concerning the economy of Azerbaijan announced at the Moody's event.Thus, according to the most optimistic forecasts, this year the country's GDP will rise by 1%, and pessimistic forecasts remain unchanged, the inflation will be 8-9%.

Foreign exchange losses of banks as a result of the February devaluation of the national currency amounted to 9% of the total banking capital. Devaluation has reduced the fiscal burden, but brought losses to the banking sector.

According to the forecasts of Moody's, the devaluation in Azerbaijan will continue and the pace of economic growth will decline in the second half of this year.To reduce the currency risk in the banking sector needed to develop the market of derivative instruments, ie futures market operations.The significance of this market underlined to hedge against currency risks.

It was noted that the process of dollarization in the country accelerated from 40% in the mid-2000s up to 65%.At the same time it pointed out that the increase of GDP is dependent on oil prices. 

The average price of oil this year will be 55 dollars/barrel in 2016 - 65 dollars/barrel.