Azerbaijan is beneficiary of recovery trend in hydrocarbon market - Gazprombank

Date

2/13/2022 9:12:55 AM

(MENAFN- AzerNews)

By Trend

Azerbaijan is the beneficiary of the recovery trend which is observed today in the hydrocarbon market, Deputy Head of the market Research Department at the Russian Gazprombank Gulnara Khaidarshina told Trend .

Khaidarshina reminded that brent crude oil is traded at $88 per barrel, which is by 37 percent more than the pre-crisis level and by 4.4 times more than the lowest level since the beginning of the COVID-19 pandemic, which we observed in the second half of April 2020.

'Of course, high oil prices support the Azerbaijani manat rate,' the deputy head of the department added. 'I would like to determine two channels through which this supporting effect is coming. Firstly, the Azerbaijani economy benefits from high inflows of export earnings due to high oil prices.'

Khaidarshina said that for example, Azerbaijani export volume increased by 1.5 times over 11 months of 2021.

'Taking into account that the share of oil and gas products in export volume is close to 90 percent, this increase in export earnings has been mainly stimulated by high prices and growing demand for hydrocarbons,' deputy head of the department said.

Khaidarshina said that high inflows of export earnings contribute to the stability of the situation in the Azerbaijani foreign exchange market and the growth of the assets of the State Oil Fund of Azerbaijan (SOFAZ).

'Despite the stimulating fiscal policy, SOFAZ's assets grew by 3.4 percent and exceeded $45 billion as of 2021,' the deputy head of the department said. 'Secondly, high oil prices allow to fix the devaluation expectations of the population and avoid the excess demand for foreign currency in the market.'

Khaidarshina added that this also contributes to the stable exchange rate of the manat and allows minimizing the spending of the sovereign fund on interventions.

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