The board of the Central Bank of Azerbaijan (CBA) said this week that it will not continue to target exchange rates between the U.S. dollar and the nation's currency.
The board said the bank will focus instead on implementing new exchange-rate policy that is dependent on its reserves of euros and U.S. dollars. Officials said this focus will allow the bank to be flexible in the foreign-exchange market, in which the CBA said it would continue to participate. Flexibility in this area will improve the status of Azerbaijan's macroeconomic policy, the bank said.
In January, the bank said measures of stability would be pursued with its reserves of foreign currencies. The bank said it purchased $270 million in 2014, which it said allowed the national currency to stabilize despite regional economic turbulence. The bank said at the beginning of the year that these measures would also allow for a cushion in the event of a currency crisis.