National currency velocity climbs in Azerbaijan

Baku. 10 October. REPORT.AZ/ In August 2017, velocity of Azerbaijani manat amounted to 5.89 points.

Report informs citing the Central Bank of Azerbaijan (CBA) velocity of manat showed an increase of 0.2 points compared to September and by 0.11 points compared to same period in 2016. As of January 1, 2017, velocity of Azerbaijani manat made 5.2 points.

Analytical Group of Report informs, according to Central Bank statistics, minimum rate of turnover (2.68 ) over the last 16 years recorded in January 2015, on the eve of the first devaluation. The maximum limit of this indicator recorded in 2005 (15,72%). Notably, velocity of money is the frequency at which the average unit of currency is used to purchase newly domestically-produced goods and services within a given time period. The growth in velocity of manat in August caused by an increase in the manat mass in circulation by 201 mln. AZN or 1.77%, and monthly inflation rate of 0.2%.

"In the current situation, analysis of increase in velocity of manat shows soft inflation continues in Azerbaijan and manat in circulation reducing softly. Notably, no significant change in volume of cash in circulation at the turnover rate of the manat expected in coming months. It is possible that seasonally adjusting speed of the manat will continue to grow in the background of inflation acceleration in the coming months", analysts said.

Analytical Group of Report News Agency informs, if the velocity of the manat occurs due to the acceleration of inflation and stable growth of the manat mass on the back of GDP growth, this is a positive factor for economy: "But if the decline in GDP is driven by inflation and growth in the manat mass, this is a sign of stagnation in economy".