Azeri Central Bank Resumes Currency Sales to Meet Dollar Demand

The Azeri central bank resumed foreign-currency sales for the first time in more than four months to ease pressure on the national currency amid rising demand for dollars.

The regulator offered $100 million in an auction Tuesday, meeting half the demand by 29 lenders, the central bank said in an e-mailed statement. Another $100 million was provided by the sovereign wealth fund known as Sofaz.

The third-largest oil producer in the former Soviet Union has seen its currency market fail to regain balance as households and banks continue to seek out dollars after the manat was devalued twice last year. The central bank burned through over two-thirds of its reserves last year to support the currency, which lost about half its value against the dollar in the world’s worst performance in 2015.

The central bank hasn’t sold dollars since Feb. 29, when it offered $60 million. Sofaz has stepped in instead, offering $50 million in auctions twice a week. The wealth fund doubled its offer on Tuesday to meet the demand in full, the central bank said.

The manat was 0.8 percent stronger at 1.5479 versus the dollar as of 3:43 p.m. in Baku, the Azeri capital. The currency lost 3.8 percent against the dollar in June after four months of gains. That was worse than all but one of its peers in the former Soviet Union, with the Russian ruble appreciating 4.3 percent. Oil had its biggest quarterly jump since 2009 in April-June.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE