On FX auction

12-01-2021

$142,2 million worth demand was fully covered at the currency auction held by the Central Bank on 12 January 2021 with the participation of the SOFAZ.

The average weighted exchange rate of the manat was 1,7000.

Expectations shaped against the background of unfounded reports in mass media and social networks about depreciation of the manat over recent days have led to certain demand in the cash currency market, that translated to a relative increase in demand at currency auctions. However, in light of the rise in oil prices compared to last year, positive oil production related decisions at the recent OPEC + meeting, kick-off of vaccination programs against the COVID-19 virus globally and significant transfers from the SOFAZ, we note that claims about the depreciation of the manat is unfounded. In this regard, we believe that the growing demand for cash currency is temporary and will slow down in the nearest future.

At the same time, recent claims on some websites that banks have problems with the sale of non-cash USD and that this is related to currency auctions are unfounded. We would like to inform you that the Central Bank conducts currency auctions twice a week (on Tuesdays and Thursdays) and banks' demand for both cash and non-cash currency is fully met at auctions.

We would like to emphasize once again that the exchange rate of the national currency has been stable for 4 years since 2017, and this year the Central Bank will continue to focus on ensuring stability in the FX market.