Azerbaijan Currency Crashes 50% As Crude Contagion Spreads
First the Russian Ruble…
Then Kazakhstan’s Tenge…
And now Azerbaijan’s Manat crashes 50%…
As Bloomberg reports, “It looks like Azerbaijan’s authorities are following Kazakhstan’s devaluation path,” said Oleg Kouzmin, a former Russian central bank adviser who works as an economist at Renaissance Capital in Moscow. “After devaluing the currency once, some time ago, they concluded that the first move was not enough to tackle all the challenges of a weaker oil price environment.”
Azerbaijan relies on hydrocarbons for more than 90 percent of its exports and the manat has lost almost half its value against the dollar this year, the worst performance of currencies globally.The Azeri central bank’s reserves were at $6.2 billion at the end of November, down from more than $15 billion a year earlier.
The Russian ruble’s collapse and a 70 percent plunge in the crude price since June last year have ushered in a new era of volatility for Azerbaijan, which is also beset by challenges ranging from declining oil output to a festering conflict with neighboring Armenia.
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