Oktay Akhverdiyev: Rate of manat not to be less than dollar - COMMENT

Baku. 18 February. REPORT.AZ/ Presence of low inflation - up to 5% per year stimulates and activates the domestic economy, Report was told by the expert economist, former Deputy Minister of Economy, Oktay Ahverdiyev. At the end of last year, the Central Bank of Azerbaijan (CBA) made a statement regarding plans for 2015, including about the direction of monetary policy.It is clearly stated that the stability of the national currency will continue in 2015, said the expert.

He stressed that the CBA regulated the rate of manat  depending on the dollar.But for that the Central Bank should carry out foreign exchange intervention and to take some other action.In a year the Central Bank had to intervene in the 1.5-2 billion dollars in order to keep the manat rate at a stable level.

Ahverdiyev pointed to the fact that recently the euro against the dollar began to fall.Our trade is linked to the euro, i.e we sell oil and gas to Europe for euro.If the euro against the dollar starts to fall, it begins to fall against manat as well, as we regulate the course of the national currency through the dollar.Azerbaijan is losing on this.

Former Deputy Minister praised the recent decision of the Central Bank on the introduction of a mechanism for the exchange rate policy of the currency basket:"But the rate of manat will not be less than a dollar.I even think that it will remain as it is. But after that, the euro to increase against manat",  the expert said.

He also recalled the recent statement by President Ilham Aliyev, in which the head of state noted that the rate of the manat to the euro should be equal: At the moment, the CBA is busy solving this problem.

Touching upon the agiotage topic around this issue and sudden buying of cash dollars, the economist said that this situation is harmful for the population: "People are driving themselves into trouble for the reason that now all will obviate manats and buy dollars, resulting in increased weight of the manat and its purchasing power to fall, which in turn means higher inflation", Ahverdiyev said.

According to him, it is necessary that experts to talk on television, in print and explained what the head of the CBA meant.

That is, it is necessary to explain that there is a change of the manat against US dollar, and is adjustable rate with respect to the euro,  the expert said

Touching upon inflation as a result of exchange rate reform the expert said that there is an unwritten rule on the correctness of inflation to 5%: "It is even necessary for the activity of the economy.Appears thing to fight inflation, which stimulates the economy".

According to him, inflation  is in every country and there is no country in the world without it. "Inflation is even in the most developed countries because it is practically impossible to balance the economy.In developed countries, where the economy is relatively balanced, inflation is 0.2-1%, but can't prevent an increase in inflation above 5%" , Ahverdiyev resumed.