BAKU, Azerbaijan, February 17. The international rating agency Fitch notes that maintaining the de facto peg of the exchange rate of the Azerbaijani manat to the US dollar remains a priority policy objective for Azerbaijan, Trend reports.
"The Central Bank of the Republic of Azerbaijan uses the exchange rate as an intermediate operational benchmark and has introduced tools to enhance transmission to the money market and bank rates. Monetary policy is constrained by underdeveloped capital markets, excess liquidity, low level of financial intermediation and the still relatively high degree of dollarization of finances," the information of the agency says.
Meanwhile, Dutch company ING and the international rating agency S&P Global Ratings forecast that Azerbaijan will maintain the de facto peg of manat to the US dollar at the level of 1.7 manat to one dollar at least until 2026.
To note, Fitch Ratings has affirmed Azerbaijan's long-term foreign currency Issuer Default Rating (IDR) at 'BB+' with a 'Positive' outlook.
The rating is underpinned by a very strong external balance sheet, the lowest public debt among peers, and the flexibility of financing through large sovereign wealth fund assets.
The positive outlook reflects the continued strengthening of external and fiscal buffers due to higher-than-budgeted energy prices, as well as prospects for tighter spending restraint in the energy sector.
Stay up to date with more news on Trend News Agency's WhatsApp channel
