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The Central Bank of Azerbaijan switched to floating rate of the national currency from December 21, 2015. As a result, the exchange rate of the US dollar and Euro to manat rose by 47.6 percent and 47.9 percent and stood at 1.55 manats and 1.685 manats, respectively, the Central Bank said, as reported by Trend agency. 

Commenting on the news, Doctor of Economics Ogtay Haqverdiyev, the former head of the pricing, economic and fiscal policy department of Azerbaijani Cabinet of Ministers, told Trend that the step was ‘a coercive measure’ explained with the ongoing processes on the world currency market. “What we see now, is the real price of manat,” said the expert.

Minval.az took a sharper stance on the topic writing that ‘manat again saw a record collapse.’ According to the statement made by the Central Bank of Azerbaijan, the complicated processes going on in global economy, leading central banks’ recent decisions, the energy products’ supply and demand imbalance and other factors had an impact on Azerbaijan’s economy which is ‘tightly integrated into the global economy,’ the website writes.

According to Turan agency, manat rate is 1.55 to 1$ today, tomorrow it can be even lower to the global currencies. This is the result of the Azerbaijani government’s overlooking of the fundamental factors, which decide the correlation of supply and demand and the creation of a real economy. As a result, the positive balance of the foreign trade and the currency flows into the country sharply reduced. 

Interfax-Azerbaijan reports that as a result of the switch to floating rate, manat depreciated by 47.6 percent, and by 97 percent since the beginning of the year.