Manat slides as Azerbaijan’s central bank decides to abandon currency peg

By FXStreet FXStreet (Mumbai) – The central bank of Azerbaijan abandoned its currency peg and floated the manat. Back in February, the central bank governor had told FT of its intention to do away with the currency peg. Governor Elman Rustamov had said, “We consider that we should transit to a more flexible exchange rate regime and gradually we will transit to an inflation-targeting regime.” The currency had been pegged to the dollar since mid-2011. The future value of the manat, the central bank said would be “determined by demand and supply on the forex market”.

This decision marks the manat’s second devaluation in 2015 and is in line with Kazakhstan’s August’s decision to float of its currency in August. In February when the central bank moved towards a dollar-euro basket and thus changed the way it priced its currency. The manat’s value had then shot up from 0.78 per dollar to 1.04 per dollar. However, today the value fell to 1.55 per dollar following the central bank’s decision to abandon its currency peg. The manat will likely end the year as the worst performing currency.

The central bank’s need to abandon the currency rises from the low oil prices which has been …read more

Source:: FX Street