OREANDA-NEWS. August 26, 2014. The Central Bank of the Republic of Azerbaijan regularly discloses information in the quarterly Monetary policy review on its sterilized intervention operations in the foreign exchange market to ensure the stable exchange rate of manat.

Note that sterilized foreign exchange intervention is a purchase of excess foreign currency to prevent sharp depreciation of a foreign currency or considerable appreciation of a national currency. Generally, central banks purchase currencies when a country has a surplus in the balance of payments and demand exceeds supply in the foreign exchange market.

However, some mass media outlets have misinterpreted the information on CBA’s sterilized foreign exchange interventions in recent days and delivered this to the public as a sale of currency.

Note that, on the backdrop of the country’s balance of payments surplus, demand exceeds supply in the Azerbaijani foreign exchange market. In this regard, the CBA made purchases of USD 1385 million in 2010, USD 4153 million in 2011, USD 1584 million in 2012, USD 2457 million in 2013, and USD 967.4 million in Q 1, 2014 from the foreign exchange market and channeled them to overall foreign exchange reserves.

Foreign exchange reserves at the disposal of the CBA amounted to USD 15163 million, having increased by 7% in H1, 2014, which considerably exceed international norms of sufficiency of foreign exchange reserves.