CBA: Individuals are main sellers of US dollars in Azerbaijan's cash market

Individuals account for most US dollar sales in Azerbaijan's cash foreign exchange market, Central Bank of Azerbaijan, CBA, Chairman Taleh Kazimov said at a press conference today, Report informs.

According to him, deposit dollarization in Azerbaijan exceeded 40% in 2021, but has now fallen by 30 percentage points to 25.6%.

"At the same time, deposits are growing, primarily in the national currency. I emphasize this because individuals carry out the main share of US dollar sales in Azerbaijan's cash foreign exchange market. Some experts link this to a decline in people's real incomes, arguing that this is why people are selling foreign currency savings kept 'under the mattress.' This may be one possible explanation. At the same time, another trend is also being observed: as people sell foreign currency in the cash market, the volume of manat deposits has increased significantly compared with previous years. Not only are manat deposits increasing, but so is the number of unique depositors. At the beginning of 2024, the number of unique depositors stood at 113,900, while by the end of June this year it had reached 220,000. Thus, in about two and a half years, this figure has almost doubled. In other words, several factors are influencing this process," Kazimov said.

Kazimov added that a decline in imports is also contributing to lower demand in the foreign exchange market.