BAKU, Azerbaijan, July 3. The monetary policy of the Central Bank of Azerbaijan (CBA) builds on a balanced and sustainable approach, Executive Director of the CBA Rashad Mammadov told Trend in an exclusive interview.
According to him, in the age of digital transformation, the future of the national currency, the concept of new generation banknotes, the optimization of cash circulation, and the importance of investment banknotes are increasing.
He answered questions about the security systems of national banknotes, updated denominations, and strategic goals.
The executive director said that in an era of rapid development of digital payments, the CBA's cash policy is based on a balanced and sustainable approach.
"International experience, in particular the approach of the European Central Bank, shows that cash is an integral part of the financial system and, although its role has been transformed, its importance remains. In this regard, the main priorities of the Central Bank in the field of cash are concentrated in several directions:
- Ensuring accessibility to cash - preserving the ability of the population and business entities to obtain cash at any time;
- Optimization of cash circulation - reducing logistics, processing, and storage costs, modernization, and automation of cash infrastructure;
- Renewal of national banknotes - further improvement of the security elements of banknotes according to modern standards and renewal in terms of design;
- Strengthening the resilience of payment systems - maintaining the role of cash as an alternative means of payment in the event of technological risks and emergencies;
- Expanding cooperation with the banking sector - developing more effective models in the field of cash processing and recirculation application.
Analysis of the nominal structure, improvement of the quality of money in circulation, improvement of regional distribution mechanisms, and application of technological solutions will be among the main directions," he explained.
Mammadov also spoke about the resistance of the national currency's security systems to counterfeiting methods.
According to him, recently, photos of banknotes made in various designs and denominations, mainly through artificial intelligence applications, have been circulating on social networks, causing confusion among the population.
"As we have stated in the inquiries received by the Central Bank on this issue, such information isn't true. We ask to refer to the Central Bank's website and social media pages as the official source of information on changes in national banknotes.
Information on banknotes in circulation is posted on the official website of the Central Bank. Public information about the updated banknotes or any changes to existing banknotes is organized by the Central Bank through the official website of the Central Bank and social media pages before their release into circulation. One of the latest changes was the release of the updated 50-manat banknote into circulation in December last year. On July 15 of this year, the updated 100-manat banknote is planned to be released into circulation.
According to the analyses, it's observed that counterfeiting methods are most often carried out using primitive methods (color copying or scanning). Such counterfeit money is easily identified by bank employees or equipment. As a result of the high technical indicators of national banknotes and the reliability of security elements, the level of counterfeiting of national banknotes is considered significantly lower compared to the leading currencies of the world and the currencies of neighboring countries.
Mammadov recalled that the "Independent Azerbaijan" concept, which was implemented after the denomination in 2006, is celebrating its 20th anniversary. In this regard, the executive director said that the national currency of Azerbaijan, which is currently in circulation - the manat - was released into circulation in 2006, dedicated to the theme of the "Independent Azerbaijan" concept.
"The liberation of our lands from occupation and the restoration of the territorial integrity and sovereignty of Azerbaijan have conditioned our country to enter a new political and economic level in the region and the world. This, in turn, has brought to the agenda the issue of adapting our national currency, which is one of the main statehood attributes, to the new era and challenges. The Central Bank has conducted a public survey in 2024 to determine the concept theme of the new generation of national currency and subthemes for denominations, and at the next stage, it's planned to begin work on the creation of currency designs and their security systems in the new concept. According to international practice, work on the creation of a new concept is carried out by central banks for approximately 2 to 4 years. Information about any changes will be presented to the public in advance by the Central Bank," he said.
Mammadov also shared the results of the transfer of the service of exchanging unusable banknotes directly to operator banks (ABB, Kapital Bank). He noted that in order to increase the accessibility of this service to the population, the exchange of national banknotes has been provided by the branches and departments of the operator banks: International Bank of Azerbaijan and Kapital Bank OJSCs operating in the country since March of this year.
"Currently, all branches and departments of these banks fully meet the requests of the population. It should be noted that this service is provided free of charge. This change, by giving citizens the opportunity to choose, also helps them save time and use the service promptly," the official noted.
Interest in investment banknotes is growing against the backdrop of the price volatility observed in the precious metal markets in recent times. The executive director answered a question about the advantages of investment banknotes put into circulation by the CBA, as well as the mechanisms for their sale and redemption.
"On the occasion of the 100th anniversary of the birth of the National Leader Heydar Aliyev, the Central Bank, for the first time in 2023, issued investment banknotes made of high-quality gold and designed by local experts in various weights: 1 troy ounce, 1/2 troy ounce, 1/4 troy ounce, and 1/10 troy ounce. These banknotes are considered legal tender in the territory of Azerbaijan at their nominal value.
The wide range of options for investment banknotes presented in various weights, as well as the presence of an effective redemption mechanism, create favorable conditions for the efficient organization of the circulation of these instruments and the wider spread of their use. In order to increase the accessibility of investment banknotes to the population, the implementation of sales and redemption operations through sales agents is aimed at increasing the efficiency of services and ensuring transparency of the process," he clarified.
Mammadov pointed out that currently, the sale and redemption of these banknotes is organized through Turan Bank and Bank of Baku OJSCs, which were designated as sales agents by the CBA.
"Expertise is organized on the investment banknotes redeemed by sales agents, and the value of the banknotes redeemed from citizens is paid on the same day. The points I have mentioned increase the attractiveness of investment banknotes as a reliable investment instrument, and also serve to expand the population's gold-based savings and investment opportunities," the CBA official concluded.
