Central Bank`s statement about future of the manat

14:57 - 30.12.2019


December 30, Fineko/abc.az. The dynamics of the manat exchange rate will be one of the important conditions for low inflation next year, says Central Bank’s statement on the main directions of monetary and financial stability policy for 2020 in the medium-term period.

According to the statement, in comparison with the reducing effect of the strengthening of the manat on prices, its reduction in price is higher. Within the current exchange rate regime the Central Bank will create conditions for the formation of the manat rate on the basis of macroeconomic fundamentals.

The main factor determining the long-term dynamics of the manat exchange rate will be the state of the balance of payments, which may change under the influence of external shocks and capital flows. Therefore, changes in prices and capital flows, as well as the dynamics of nominal and real effective exchange rates on the main export products, will be constantly monitored, and their impact on the economy and financial markets will be in the spotlight. Diversification of sources of foreign exchange supply, as well as effective regulation of foreign exchange supply and demand by the state in the coming period will also act as the main guarantor of long-term balance in the foreign exchange market.

The Central Bank reserves the right to intervene in the foreign exchange market to smooth out the ratio of supply and demand.

By Elmir Murad

 

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