Since late April the euro against the Azerbaijani manat fell by 0.04 points. The dynamics of decline continues to the present. If on April 30, 2012 exchange rate for one euro stood at 1.0415 manat, today the figure stands at 1.0000 manat to the euro.
It is known that unlike the dollar, exchange rate of which to manat is adjusted by the Azerbaijani Central Bank depending on the inflation process in the country, the euro exchange rate is calculated on the basis of cross-rate, and varies depending on the processes in the international currency market. Consequently, the current decline of the euro comes from the disappointing news about the economy in the Eurozone.
First, news from Greece played its role in reducing the cost of the euro, where the talks ended without results on the formation of the ruling coalition and the government of "technocrats" and the holding of new parliamentary elections and the establishment of an interim government were announced. So, for this reason, today the euro against the dollar broke down the psychological mark of $1.27 per euro, and updated the minimum mark for the last four months. Second, considerable importance in the negative behavior of the euro is due to financial problems in Italy, where the international rating agencies lowered the credit rating amid the country's problems with public debt.
At the same time the strengthening of the dollar and rising oil prices on world markets enhance the trend of euro exchange rate's decrease.
2012 already started with a significant depreciation of European currency in the world currency market. The lowest figure for 10 years in Azerbaijan was recorded on January 16, 2012 - 0.9943 manat per euro. Then the situation was also associated with Greece, in particular concerns of investors about the fact that Greece did not receive necessary for repayment of debt obligations money on time and will be forced to default. On the day the euro against the dollar fell to its lowest level in 16 months, and towards the Japanese yen - even to a minimum of the past 11 years.
Noteworthy is the fact that at all times since the beginning of the year a sharp drop of the euro is observed in Azerbaijan in the middle of each month. Thus, in January, falling to the level of 0.9943 manat to the euro, was noted on the 16th, the minimum level of the euro to manat (1.0231) in February was also recorded on 16th. On March 16 euro once again demonstrated the minimum level for the month at around 1.029 manat per euro. Then, having experienced steady April, the euro reached a new minimum level for May on the 16th.
The euro will continue to fall until the tensions over the financial condition of some eurozone countries do not subside. Experts note that in the medium term negative impact of the currency weakening on the threat of default of one of the eurozone countries can have a much more positive effect. Opinions of experts differ on longer-term prospects for the euro. For example, the Central Bank of Azerbaijan said at the beginning of the year that taking into account the processes in the global foreign exchange market, it is almost impossible to make even an approximate prediction of the manat compared to the euro.
In general, sharp weakening of European currency is unprofitable for Azerbaijan, otherwise the competition between the Western and domestic producers will increase on many commodities. Effect of import substitution will be lost, in other words, the inflow of Western goods in the market of the country will increase, leading to excessive competition for domestic producers.
The Government of Azerbaijan for the first time included a forecast of the average annual rate of national currency against the euro in the concept of socio-economic development in 2012. Typically, the budget package fix forecasted average exchange rate of manat against the dollar. Forecasts against the European currency were prepared on a formal basis.
According to the forecasts of the Azerbaijani government, the rate of the manat against the euro in 2012 is expected at the level of 1.0910 manat per one euro against the expected to 1.0939 manat in 2011 (according to the CBA, at year-end exchange rate was 1.0178 manat). Exchange rate is forecasted at 1.0608 manat in 2013, 1.0430 manat in 2014 and 1.0387 manat in 2015.
Leyla Abdullayeva /Trend