How Fed rate hike to affect Azerbaijani manat rate?
An increase in the key interest rate of the US Federal Reserve System (Fed) will not have a tangible impact on the rate of the Azerbaijani manat, Muslim Ibrahimov, doctor of economic sciences, expert in economic issues, said.
Following the meeting on March 20-21, the Fed decided to raise the federal funds rate by 25 basis points to 1.5-1.75 percent per annum. The FOMC rate decision coincided with the forecasts of the vast majority of economists and market participants. In 2018, the Fed plans to raise the rate twice more.
"An increase in the key interest rate is not unexpected, as it was already announced that it will be raised by several times in 2018," Ibrahimov told Trend. "That is, in principle, an increase was expected, and the economies of many countries were ready for this."
Muslimov added that the rate change does not have a direct impact on the economy of Azerbaijan.
At the same time, an increase in Fed key rate may have a negative impact on oil prices.
"While the oil-producing countries are discussing the extension of the OPEC + agreement, which is aimed at stabilizing the market, an increase in the Fed rate will help reduce oil prices because all oil trading operations are conducted in dollars," he said.
In December 2016 at the meeting of oil producers in Vienna, 11 non-OPEC member countries (including Azerbaijan) agreed to cut the oil production by a total of 558,000 barrels a day. The agreement was concluded for the first half of 2017 and was extended until the end of the first quarter of 2018 at the meeting on May 25,2017.
At the last OPEC meeting in Vienna, the agreement was again extended until the end of 2018. Azerbaijan supported the decision.
Southern Gas Corridor to benefit all participating countries - Russian expert
The Southern Gas Corridor (SGC) project will benefit both Azerbaijan and other participating countries, Alexander Pasechnik, head of the Analytical Department at Russia's National Energy Security Fund, told Trend.
"All involved parties will benefit from the implementation of the SGC project," he said. "The project will give impetus to infrastructure development, which will have a multiplier effect on the economies of the participating countries."
The expert stressed that the project will lead to increased competition, primarily in the Turkish market.
"The initial stage of the SGC project involves supplying up to 10 million cubic meters of gas per year to the Turkish market, the Azerbaijani gas will primarily go there," he said. "As is known, Russia's Gazprom company is also expanding potential to increase its presence in the Turkish market. However, given the growing demand for gas in Turkey, I believe that this won't be a problem for suppliers, although new supplies will push the parties to price compromises."
The Southern Gas Corridor is one of the priority projects for the EU and provides for the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.
At an initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.
As part of the Shah Deniz Stage 2, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).
Ambassador: TAPI gas pipeline project to ensure economic development of Asia
The transnational megaproject of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI), which is to be put into operation by 2019, will become a powerful impetus for the regional economic development, Turkmen ambassador to Malaysia Yazguly Mammadov said, the online newspaper of the Turkmen Oil and Gas Complex reported.
Mammadov added that the construction, launched in Turkmenistan on December 13, 2015, will create not only new jobs, but also ensure stable energy supply of the region.
The diplomat stressed that TAPI project entered a new stage of implementation on February 23, which initiated construction work in Afghanistan.
The heads and officials of four countries took part in the opening ceremonies in Turkmenistan's Mary province and Afghanistan's Herat province.
After the completion of the construction, the pipeline will annually transport 33 billion cubic meters of gas from Turkmenistan's Galkynysh gas field, the world's second biggest gas field.
Mammadov also said that the Asian Development Bank, the European Bank for Reconstruction and Development and the Japanese government expressed interest in financing the TAPI project.
BSTDB: North-South corridor to help cargo transportation growth via Azerbaijan
The International North-South Transport Corridor will make a significant contribution to increase in cargo transportation through Azerbaijan, the Black Sea Trade and Development Bank (BSTDB) told Trend.
"BSTDB is interested in such infrastructure projects," the bank said. "The North-South project is a regional initiative covering several BSTDB member-states, which is another reason for BSTDB to support it."
"This project is significant for Azerbaijan not only as for a transit country, but it is also expected to make a significant contribution to the growth of Azerbaijani exports and supplies of goods to the country," the bank said.
"BSTDB is interested in any project contributing to the development of Azerbaijani economy and regional cooperation," the bank said. "We are following the project development and stand ready to contribute as a co-financier."
The North-South transport corridor is designed to connect northern Europe with India and South-East Asia. The route will also connect the railways of Iran, Azerbaijan and Russia.
At an initial stage, six million tons of cargo are planned to be transported through the corridor per year and 15-20 million tons of cargo in future.
