Azerbaijan, Turkey refuse from U.S. dollar in mutual trade

By Azernews

By Kamila Aliyeva

Azerbaijan and Turkey intend to use national currencies - the manat and the lira - for mutual payments in bilateral trade.

"Last year, we have carried out manat/lira exchange transactions of 5 million Turkish liras. This year we intend to increase the figure even more, we are ready to meet demand,” Chairman of Ziraat Bank Azerbaijan Avni Demirci said in interview with Our Business World magazine of Azerbaijan-Turkey Businessmen and Industrialists Public Association (TÜIB).

The bank is taking concrete steps to refuse from USD in mutual trade, according to Demirci.

“We are funding trade with Turkish lira and Azerbaijani manat without the need of third-party currency. When people bring manat, we sell lira to them and vice-versa,” he said.

“Ziraat Bank's head office also supports us,” Demirci said, adding that now, the central banks of both countries need to join this process and conduct swap operations.

Some countries use national currencies in bilateral trade instead of dollar and euro. It lowers demand of the national economy in foreign currency, easing pressure on the exchange rate of national currencies.

However, views of experts and analysts on the issue are controversial. Although payment in national currencies is technically more convenient, as there is no need to convert currency and face additional costs, associated with the conversion, national currencies are not strong enough for the wide use of them in mutual trade, for example in energy trade.