CBA says stability of bilateral national currency exchange rate ensured

The Azerbaijani Central Bank (CBA) conducted sterilization of foreign currency to the amount of $233 million to avoid the significant strengthening of manat and to neutralize the negative impact on the competitiveness of the non-oil sector during the first quarter of 2012, the Central Bank's report on monetary policy said today.

"The Central Bank continued conducting its exchange rate policy within the bilateral targeting of dollar / manat in the first quarter," the report said. "Supply expanded in the country's currency market in terms of the large surplus in the balance of payments."
The exchange rate of manat compared to dollar strengthened by 0.04 percent in the first quarter 2012. The stability of the national currency during the last quarter had a positive impact on the stability of macroeconomic and financial sector.

The nominal effective exchange rate of manat strengthened compared to currencies of most countries-trade partners of Azerbaijan in the first quarter. The dynamics of the nominal effective exchange rate of manat has had an impact on the change in the real effective exchange rate.

During the reporting period manat strengthened compared to the currencies of Ukraine, Iran, and Japan both nominally and really. It cheapened both nominally and really compared to the currencies of the euro zone, Great Britain, Turkey, Russia, Georgia, Kazakhstan, Israel, China, Belarus and South Korea.

During the first quarter of 2012 the nominal effective exchange rate on the non-oil sector in the total trade turnover cheapened by 2.1 percent. Inflation in the partner countries contributed to the decrease in the real effective exchange rate by 0.8 percent. The real effective exchange rate on non-oil sector cheapened by 2.9 percent.

"Thus, during the reporting period the Central Bank has ensured stability of bilateral exchange rate of manat and dollar," the report said. "The fluctuations in the bilateral exchange rate in a number of partner countries influenced the multilateral exchange rate of manat."


/Trend/