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Azeribaijan devalues currency by 33.5% to dollar.

Azerbaijan has been less affected than other former Soviet states by Russia's economic problems but its economy is heavily exposed to price swings on global energy markets.

Baku -- Azeribaijan's central bank devalued the manat on Saturday by 33.5 per cent to the dollar and by 30 per cent to euro as slumping oil prices and an economic crisis in major trading partner Russia put pressure on the currency.

The bank abandoned the manat's dollar peg on February 16 and began using a dollar-euro basket to manage the exchange rate after a nearly 60 per cent drop in crude prices since June and Western sanctions against Russia. Azerbaijan has been less affected than other former Soviet states by Russia's economic problems but its economy is heavily exposed to price swings on global energy markets.

The manat was set at 1.05 to the dollar and 1.19 to the euro, down from Friday's 0.78 and 0.89 manats respectively.

"This decision was made in order to support diversification of Azerbaijan's economy, strengthen its international compatibility and export potential as well as to provide balance of payments sustainability," a central bank statement said. The bank said it would continue to take part in the foreign exchange market and that it would target a corridor for the manat against the dual-currency basket.

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:4EXRU
Date:Feb 21, 2015
Words:235
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