BAKU, Azerbaijan, October 22. The Central Bank of Azerbaijan (CBA) may conduct a purchase-oriented intervention in the currency market if the current trend of demand being lower than supply continues, Taleh Kazimov, the bank's Governor, said at a press conference dedicated to the parameters of the interest rate corridor, Trend reports.
“If demand in the foreign exchange market remains below supply, we will likely intervene through purchases. However, it would not be appropriate to mention any specific amount. Based on the results of the first nine months, supply in the market remains quite strong.
Therefore, we may carry out a purchase-oriented intervention. But it would not be correct to say whether the amount will be $600 million, $300 million, or $900 million, as there are still budget expenditures to consider before the end of the year,” Kazimov articulated.
To clarify, currency intervention transpires when a governmental entity or central banking institution engages in the acquisition or liquidation of foreign exchange assets in return for its sovereign currency, typically aimed at modulating the exchange rate dynamics and trade regulatory frameworks. The most comprehensive form of currency intervention involves the establishment of a rigid exchange rate relative to a specific currency or a composite index of multiple currencies.
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