By Andrei Skvarsky.
Azerbaijan’s money supply excluding bank assets has contracted nearly by half since mid-2015, an Azeri newspaper said, claiming that the reason is that Azeris have been changing national currency for dollars on a wide scale.
Between January and February, the oil-producing country’s money supply less bank assets went down 6.1% to 4.49bn manat ($2.82bn at the February 1 average market exchange rate), Russian-language daily Echo said, citing the Azeri central bank. The paper said this was the lowest mark since 2009.
“Confidence in the manat and banks is falling,” Echo quoted Azeri economist Oqtay Haqverdiyev as saying.
Moreover, the current de-licencing of banks is turning people away from the banking sector, according to Haqverdiyev. People are afraid to take their money to a bank in the fear that it will be struck off, the economist said.
According to Azeri President Ilham Aliyev, the former Soviet nation of 9.6 million, whose economy is heavily dependent on oil exports, has provided itself with a safety cushion against decreasing oil prices.
Echo quoted him as saying the 2016 budget is based on an oil price of $25 per barrel.
Over the past few days, oil has been wobbling between about $38 and about $40 per barrel.