The sale of dollars through the CBA’s auctions has sharply declined since February 2016. So, banks bought an average of $144.56 million at each auction in January. But a similar index for March was $48.23 million (almost three-fold decrease).

He said that banks mainly buy the currency, based on the needs of their customers.

"The banks do not buy foreign currency at the auction to meet their own needs in the interbank transactions,” he said. “There is such a need in case of fulfilling the obligations on foreign loans or restoring foreign currency positions of the bank.”

“In all other cases, the banks buy foreign currency relying on requests received from economic entities and their customers,” Nuriyev said.

The head of the Azerbaijan Banks Association believes that the decrease in the volume of foreign currency sales is primarily due to a decrease in the number of applications from the bank`s clients.

“Today, the amount of such requests is very small, so the banks have also reduced the amount of the purchased foreign currency,” Nuriyev said. “In addition, one has to consider that the bank`s customers also sell foreign currency to bank. It is the internal operation of each bank, so the data are not publicly available.”

At the same time, the purchase of foreign currency in the amount exceeding the bank`s own needs and the needs of the bank`s clients might adversely affect the banks and lead to a breach of the requirements for foreign exchange position.

The CBA switched to the floating rate of manat on Dec.21, 2015 as a result of which the exchange rate of dollar and euro increased by 47.6 percent and 47.9 percent and stood at 1.55 and 1.685 manats, respectively.

Azerbaijan’s State Oil Fund (SOFAZ) sold $1 million to one bank on April 1 during an auction held by the CBA.

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