Fitch: Azerbaijan restores trust to national currency

The state of Azerbaijan is gradually restoring trust to its national currency, Trend reported citing a report by Fitch Rating on the sovereign credit rating of the developing European countries.

The report reads that the decrease of the recession level in Russia has influenced neighboring countries, including Azerbaijan and Kazakhstan.

“Both countries are gradually restoring trust to the national currencies following adjustment of the forex rates in 2015. Despite the fact that the process in Kazakhstan is more rapid, the level of trust to Azerbaijani manat also increases”

Currently, the government of Azerbaijan takes certain measures to adapt to the processes that occur in the world economy, according to the outlook.

“Azerbaijan is gradually adapting to low oil prices and sharp fluctuations in the currency market that occurred in 2015. The government has already focused its attention on the provision of all necessary conditions and financial instruments to manage floating exchange rate,” the outlook reads.

Fitch analysts forecast that the country will face double-digit inflation rates at the end of the year.

Earlier, Finance Minister Samir Sharifov said that the country will gradually restore its sovereign rating. Inflation rate in Azerbaijan in 2016 is forecasted to be at the level of 10-12 percent while the rate in 2015 amounted to 4 percent, according to the country’s Finance Ministry.

The CBA switched to the floating rate of the manat on December 21, 2015 because of the necessity to bring the currency market and the exchange rate of the manat into line with oil prices.

Fitch’s credit rating for Azerbaijan was last reported at BB+ with negative outlook.