Expert: Central Bank`s interference again plays crucial role in preservation of manat


August 1, Fineko/abc.az. Expert economist Vugar Bayramov expressed his attitude towards the fact that the US Federal Reserve (Fed) has cut for the first time in 10 years the base interest rate by 25 points to 2-2.25% per annum.

He noted that despite Fed’s recent decision, the US dollar strengthened to main European and Asian currencies. According to Bayramov, the Fed limited itself to 25 points, although investors expected a decrease to 50 points: "When the Fed announced its decision, this statement directly affected the foreign exchange market. Thus, the Fed said that new cuts are not expected on the agenda. The market is also affected by statements of a range of central banks, including the European Central Bank about a possible reduction of the new accounting rate. The euro fell to $1.10 after Fed's decision. Another reason for this is linked with the decrease in the accounting rate of the European Central Bank, presumably on the 12th of next month. Obviously, depreciation of the dollar is actual neither in the global nor at the regional scale," the expert said.

"As for the national currency, the current intervention of the Central Bank in the preservation and maintenance of the exchange rate remains decisive. However, by the end of the year the Central Bank should be ready for new scenarios. Against the background of the projected growth in demand for the US dollar at the end of the year, the rate of the manat will also depend on the world market prices for oil and the rate of national currencies of our main non-oil export partners," the expert emphasized.