The official currency of Azerbaijan is the Azerbaijani manat. The manat is coded as AZN and symbolized by m. or man. This symbol was designed by Robert Kalina, who also designed the Syrian pound and the euro. The sub-unit for the manat is 100 qəpik, and the currency is circulated by the Central Bank of Azerbaijan. In January 2016, manat’s value reflected an inflation rate of 13.6%.
History of the Manat
The history of the Azerbaijani manat dates back to 1919-1923 when it replaced the Transcaucasian ruble at par value. At the time the currency only existed in banknotes whose denominations were 500, 250, 100, 50 and 25 manats. The manat was later replaced by the second Transcaucasian ruble. A second manat was introduced between 1992 and 2006, and replaced the Soviet ruble at an exchange rate of 10 rubles = 1 manat. The value of the manat was stable between 2002 and 2004, but in 2005 it started getting stronger against the dollar due to the high world oil prices and the penetration of petrodollars into the US. By 2005, one dollar was worth 4,591 manats. During this period the metals used to make coins were brass, cupro-nickel, and aluminum. The denominations of manat that were issued during the second manat phase were 1, 5, 10, 50, 100, 250, 500, 1000, 10,000, and 50,000. In January 1, 2006, a third manat, valued at 5,000 old manat, was introduced. Coins were also reintroduced in denominations of 50, 20, 10, 5, 3, and 1 qəpik. Banknotes for the new manat were designed by Robert Kalina in denominations of 100, 50, 20, 10, 5, and 1 manat.
Post - 2006 Changes
One of the changes that took place in 2009 was the renaming of the National Bank of Azerbaijan to Central Bank of Azerbaijan. This was followed by the issuance of the 1 and 5 manat banknotes with the new name of the issuing bank in 2012 and 2017, respectively. In addition, the Central Bank issued new generation banknotes which have a four-pillar protection system, and were minted with the help of the National Bank of Switzerland.
Challenges in Maintaining the Value of the Manat
A major event that affected the manat occurred in February 2015. Azerbaijan’s Central Bank devalued the manat by 33.5% against the dollar and 30% against the euro. Prior to this devaluation, there had been a significant dip in oil prices, causing the US dollar to manat exchange rate to drop from 0.78 to 1.05. President Ilham Aliyev assured Azerbaijanis that the reduced oil cost had not negatively affected the manat. However, on February 16, 2015, the Central Bank stopped pegging the manat to the US dollar and switched to the dollar-euro basket instead. Consequently, the value of the manat went from 0.78 to the dollar and 0.89 to the euro to 1.05 and 1.19 manats, respectively. This took place on February 21, a day that Azerbaijan often refers to as “Black Saturday” of the manat. As of June 2017, the manat is stable at 1.7 to 1 US dollar.