Cancellation of Private Exchange Licenses in Azerbaijan

Officials in Azerbaijan have announced the cancellation of licenses for private exchange offices, permitting the buying and selling of foreign currencies only at bank branches. Recently, the manat, Azerbaijan's currency, faced a devaluation for the second time in the past year, losing nearly 50% of its value against the dollar. The Central Bank of Azerbaijan stated that the dollar exchange rate in the country would be free and floating based on supply and demand; however, following a surge in demand and the dollar's price in exchange offices and the black market, the Central Bank announced on Thursday, January 24, that the dollar would only be bought and sold at bank branches. Following the decline in oil prices since the second half of 2014, Azerbaijan's foreign currency revenues, heavily reliant on oil exports, have decreased. Meanwhile, the assets of the Central Bank of Azerbaijan have fallen from $15 billion to about $5 billion over the past 16 months, resulting from people's efforts to convert their manats into dollars and save them. Currently, there are long queues outside bank branches in the country for converting manats to dollars, but only a few banks are selling dollars to the public in limited amounts. Following the decline in the manat's value against the dollar, the prices of goods in the country have rapidly increased, leading to protests in various cities across Azerbaijan. President Ilham Aliyev has recently stated that he will take strict action against price gouging. Among the former Soviet republics, all countries have faced currency devaluation. In Turkmenistan, for the past few weeks, dollars have been sold in banks in limited amounts with coupons. Over the past year, the value of the Turkmen manat has also decreased by 23%. The value of the Russian ruble fell by about 29% in 2015, Kazakhstan by 86%, Uzbekistan by 57%, Georgia by 28%, Armenia by about 1.6%, Kyrgyzstan by 28%, and Tajikistan by 32%. All these countries are either heavily dependent on oil revenues or have part of their income somehow dependent on neighboring countries, especially Russia.