Gazprombank: Azerbaijan’s growing non-oil and gas exports less pressure on manat

Azerbaijan’s growing non-oil and gas exports (+16.2% YoY in 10M22 to $2.4 bln) ensure greater FX supply on the local market and less pressure on the manat, as shown by the low volume of sales at SOFAZ weekly auctions, Gulnara Khaidarshina, Deputy Head of Research at Gazprombank, Chief CIS Economist, said, Report informs.

According to her, the situation on the FX market is stable, while the volume of FX sales by SOFAZ at auctions remains moderate: “As we noted in our report of April 20 entitled “Azerbaijan: Strengthening of the regional importance of economy amid external risks,” Azerbaijan is a beneficiary of high hydrocarbon prices amid the aggravation of external geopolitical risks. The average Brent price is close to $100/bbl YTD amid compliance with the OPEC+ agreement, recovery in global demand for hydrocarbons, and the easing of quarantine restrictions in China.”

“For example, on December 13, FX sales totaled $53.7 mln or 37.1% beneath the average in 4Q21, when budget expenditures peaked. It should also be noted that Tuesday’s figure was 6x less than the highest level since the onset of the pandemic, recorded in March 2020 ($323.2 mln). This creates conditions for replenishment of international reserves and maintenance of a balance on the FX market without a tightening of monetary conditions,” she added.