US-dollar soared by 121% in past 2 years since first devaluation in Azerbaijan

Baku. 21 February. REPORT.AZ/ Since the first devaluation of national currency in Azerbaijan on February 21, 2015, US-dollar up by 120.7% to 1.7352 AZN/USD on February 21, 2017.

Report informs, after first devaluation decree, official rate jumped by 34.6% from 0.7862 AZN/USD to 1.0500 AZN/USD. Next devaluation on December 21 pushed US-dollar up by 48% to hit 1.5500 AZN/USD. During last 14 months US dollar kept on gaining ground against Azerbaijani manat, featuring 12% rise. Notably the lowest official rate of US-dollar in last 14 months was reported on May 25, 2016 with 1.49 AZN/USD, the highest rate on February 1, 2017 with 1.92 AZN/USD.

Notably, after 1:5000 scale denomination of national currency on January 1, 2006, USD exchange rate started gradual downward trend on January 3 (0.9184 AZN/USD) to its lowest point on June 10, 2014 (0.7842 AZN/USD).

Report’s experts group notes that drastic decline in oil prices in global commodity market from 120 USD/barrel to 55 USD/barrel was the main cause of the national currency collapse. Slump in export incomes has resulted with growth in USD exchange rate to close negative payment balance. The later collapse of oil prices from 65 USD/barrel to 30 USD/barrel stipulated second wave of devaluation.

Notably, although currently the global oil prices are at 56 USD/barrel, the same level, which caused first wave of devaluation, the exchange rate is higher than 1.05 USD/AZN by 65%. This reflects low economic confidence of the population.