Since January 12, 2017 the currency auction has been holding in a new format. In the new format, the prices are set by the banks. The process is provided on competition, that’s the price of dollar changes from high to low. Average weighted exchange rate formed on this basis is introduced to the society as an official exchange rate, Deputy Governor of the Central Bank of Azerbaijan told.
According to him, the exchange rate is formed liberally: “Auctions serve balancing the market. Average weighted rate of manat is set as a result of auction and operations conducted out of the auction in the open market at that day. That’s if the average weighted exchange rate of manat was set at 1.8285 at the auction and official exchange rate is set at AZN 1.8311 in the second half of the day, this does not mean that the exchange rate is set administratively. Average exchange rate of manat is affected by both auction and operations in open market. The exchange rate formed today is not corrected. The change in Russia and Kazakhstan, which switched to liberal exchange rate, made up over 3% and 27%. In Azerbaijan, the change was 3.4%. Adaptation to the new condition is lower than expected. Generally, I am optimistic about market and exchange rate dynamics”.
Adaptation to floating regime is quieter than expected – central bank
19 January 2017
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The main attribute of the floating regime is that the exchange rate is fully set by market participants.
