Government goes at black currency market

Foreign exchange market of Azerbaijan encountered the problem of the illegal black market of currency exchange, which appeared due to certain liquidity issues with foreign greenbacks.

Foreign exchange market of Azerbaijan encountered the problem of the illegal black market of currency exchange, which appeared due to certain liquidity issues with foreign greenbacks. The relevant agencies of the country intend to take serious measures to prevent unofficial currency trading and implementation of illegal transactions.

Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said that the population will soon see the real results of the measures taken in this direction, adding that law enforcement agencies of the country carry out very serious work in this regard.

Head of the country’s State Security Service Madat Guliyev said that investigation is underway regarding activity on black currency market, mentioning that there are already several suspects.

Commenting on the shortage of foreign currency in the banks Chairman of Azerbaijan Banks Association Zakir Nuriyev earlier said that banks can sell the currency should they purchase it at currency auctions or from clients engaged in export operations.

The manat took a big nosedive on December 20, 2015, when the central bank decided to remove its dollar peg, thus allowing the currency to tumble by almost a third.

The CBA switched to floatingmanaged exchange rate and has been working in the floating rate regime since the beginning of 2016, not selling its currency in the market.

The country plans to move to full floating rate of the national currency starting from 2017. As for the full switch to the regime, Rustamov said that total transition requires tight macroeconomic coordination, as well as solving a number of structural problems.

“From this year on, we have operated in the regime of floating exchange rate of manat, and the fact that the CBA has stopped selling its foreign currency on Azerbaijan’s market since February 2016 confirms this. We know that currently there is a disproportion between supply and demand on the market, and the demand exceeds the supply,” he said. He stressed that the main goal is to achieve macroeconomic stability.

The official exchange rate of the US dollar and euro to the manat for December 12 were set at 1.7430 manats and 1.8396 manats, respectively.