By Nailia Bagirova
BAKU: Azerbaijan’s president, Ilham Aliyev, has ordered measures to support the economy and the ailing manat currency, including a possible tightening of currency controls, help for banks, and a sell-off of state assets, state television reported on Monday.
Azerbaijan’s manat currency, has lost 33 percent of its value against the dollar in the past month. The country has burned through more than half its foreign currency reserves trying to defend it against the effect of falling oil prices.
Speaking at a meeting of the government, Aliyev said parliament would convene in an extraordinary session on Tuesday to debate government proposals to strengthen regulations on the currency market, state TV reported.
There were no details on which regulations would be tightened. Parliament is dominated by Aliyev loyalists.
In other measures to shore up public finances, Aliyev said the government had prepared a large-scale privatisation plan with the participation of local and foreign experts, while proposals on the recovery of problematic banks were also under consideration.
Aliyev said that measures on deposit insurance and the issuance of state bonds would also help to support the currency.
The State Oil Fund of Azerbaijan (SOFAZ) sold a total of $193.9 million on the foreign exchange market on Monday in a bid to prop up the weakening manat.
It was the fund’s third intervention this year. It has sold $539.9 million in total so far, while $100 million was sold by the country’s central bank.
Azeri state oil company SOCAR said on Monday it had offered to buy back its outstanding Eurobonds worth up to $500 million and maturing in 2017.
The cost of borrowing for Azerbaijan’s government has gone up as investors perceive the risk of holding the country’s assets to have increased. Buying back the Eurobonds could save Azerbaijan money in the longer time.
REUTERS
