Azerbaijan devalues currency

Azerbaijan Central Bank decides to devalue its currency by almost 50 percent

Photo by: AA (Archive)
Photo by: AA (Archive)

Azerbaijan Central Bank devalued its currency by almost 50 percent on Monday, citing global economic weakness and falling oil prices, according to a statement issued by the bank on Monday.

The central bank decided to devalue the manat by 47.63 percent to 1.55 manats per dollar, and 1.68 manats per euro, which corresponds to a devaluation of 47.88 percent, the statement said.

The central bank also adopted a floating exchange rate.

"The decision of the central bank of Dec. 21, 2015 is to move to a floating exchange rate for the manat. On the basis of this decision, the rate of the manat will be determined depending on supply and demand in the foreign exchange market," the statement also said. 

Oil and gas account for 95 percent of Azerbaijan's exports and 70 percent of government revenue.  

The sharp decline in the price of oil put pressure on reserves at the central bank as it sought to enforce the manat's peg to the dollar, central bank governor Elman Rustamov said in an interview with the Financial Times last February.