Issues of stability and sustainability of exchange rates of the national currency of Azerbaijan

Abstract

The exchange rate has a direct impact on the economy of the Republic of Azerbaijan. Exchange rate changes depend on market conditions. Therefore, the exchange rate is affected by the state of the balance of payments, the extent of currency use in international payments, speculative currency transactions and the activity of currency markets, inflation and many other factors. The article shows the possible consequences of their influence on the exchange rate and gives examples. Dependence on the growth of money supply, monetary base and inflation is clearly manifested in the country. An analysis of the economic aspects directly affected by the exchange rate, namely foreign trade, capital flows, interest rates, business development, purchasing power of the population and economic growth is carried out. Currency stabilization measures, including stabilization of banks' currency positions, increasing control over the purposeful use of previously granted loans, distinguishing speculative operations from others, emphasize the importance of this topic. The implementation of these measures will have a positive effect on the stabilization of the exchange rate and the economic situation of the country in general..