Azerbaijan, the third-largest oil producer in the former Soviet Union, devalued its currency after the falling price of crude pressured the country’s finances.
The central bank set the manat at 1.05 against the dollar, compared with 0.784 as of February 21, it said today in an e-mailed statement from the capital, Baku.
The decision is aimed at “stimulating the diversification of Azerbaijan’s economy, strengthening the international competitiveness of the economy and its export potential, and guaranteeing stability in the balance of payments,” it said.
Azerbaijan’s foreign reserves fell 11% to about $12.7 billion as of Jan. 31 from a year earlier, partly as it sought to protect the manat’s peg to the US dollar.
It abandoned the peg February 16. Standard & Poor’s lowered the outlook on Azerbaijan’s BBB- credit rating to negative on Jan. 30, citing oil’s decline and the pressure on the manat from weaker terms of trade.
Brent crude, the benchmark grade for more than half the world’s oil, has dropped about 45% since June last year. Azerbaijan produced the equivalent to 889,000 barrels a day of crude in January, the State Statistics Committee said February 13.
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