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BAKU Dec 12 Azerbaijan plans to fully float its
currency, the manat, starting next year, the head of the
country's central bank told reporters on Monday.
Azerbaijan adopted a managed float earlier this year as the
price of oil slumped, to ease pressure on its foreign exchange
That policy established a range within which banks could buy
and sell manats of 4 percent on either side of its official rate
. At times this year, it has suspended sales of
The main reason for floating the currency now, said Elman
Rustamov, the head of central bank, "is the achievement of
Foreign exchange trading had ended before Rustamov spoke.
Even so, the manat traded at 1.7430 per dollar on Monday, a new
Some banks, where the rate stood at 1.85 per dollar, had
halted or limited sales of hard currency to $100 per person in
recent weeks, raising fears of another devaluation.
"Switching to full floating rate requires serious
preparation, very tight macroeconomic coordination and solution
of some structural problems," Rustamov said. A concrete plan for
the new policy will be submitted soon, he said.
The central bank has not been selling foreign currency on
the market since February.
"There is a disproportion on the currency market now, when
demand exceeds an offer," Rustamov said.
The central bank raised its refinancing rate to 15 percent
from 9.5 percent on Sept. 9. Azerbaijan's current account
deficit is expected to reach $5 billion by the end of 2016.
(Reporting by Nailia Bagirova; writing by Maria Tsvetkova and
Margarita Antidze; editing by Larry King)