Lawyers and economists call Azerbaijan’s foreign currency exchange limits illegal

Natig Jafarli: “We have an unparalleled abnormal system”

Natig Jafarli: "The country's currency will be devalued, and investors will flee the country"

Aygun Mammadova* often travels internationally. Therefore, she has regularly converted part of her salary into USD for years.

She says the devaluations that have taken place and are expected in Azerbaijan are frightening. For this reason, she believes it is better to keep her money in a foreign currency.

However, regulations on the amount of money that can be exchanged out of AZN (Azerbaijani Manat) are creating problems for her.

"They don't reset the limit when the year is over"

Mammadova says she had wanted to exchange more USD this past year when her mother and father also asked her to do so for them. It was then she later learned that there is a new limit on exchanging AZN to USD.

"The limit is about 12,000 USD. The problem is that even if you reach the annual limit, they do not reset the limit at the end of the year", she says. "I do not understand the reason for these bans and limits.

"It is tyranny, there is no other name to call it"

Lawyer Akram Hasanov says the ban is unofficial, saying, "The application of the limit also violates the principle of banking secrecy. This is done either on the instructions of government agencies or on the initiative of the banks. Information about transactions should not be being shared without the customer's consent."

Əkrəm Həsənov
Lawyer Akram Hasanov says limits on exchange are not official and violate certain bank principles.

According to the lawyer, a citizen who wants to get a loan from a bank grants the bank access to information about their other debts, but does not do so during foreign exchange transactions.

"We have an unparalleled abnormal system"

Economist Natig Jafarli believes that the ban was imposed by the Central Bank. According to him, these are completely illegal and illogical.

"Since the beginning of last year, Azerbaijan has set an exchange limit into foreign currencies at around 20,000 AZN (approx. 9,667 EUR, 11,764 USD) for all citizens. Citizens who exceeded the limit were told that banks would not exchange into foreign currency within a twelve-month period, after which the limit would be reset. Yet it seems that the Central Bank has not reset it."

Natiq Cəfərli
Economist Natig Jafarli says the limit is illegal.

Jafarli fears this will lead to devaluation. "A country that imposes such a ban will sink, the national currency will be devalued, and investors will flee the country. We have an unparalleled abnormal system, the exchange rate is set by decree, so foreign investors are bypassing the country. All this happens because of such meaningless decisions."

According to Natig Jafarli, the decision pushes citizens to find other ways of exchanging cash. "For example, if I meet my limit, I will take the ID card of my brother, sister, neighbor, friend and exchange it through them. If this is not possible, I will buy a fake ID. Such illogical decisions [such as the ban] will revive the black market. Attempts to maintain the exchange rate of the Manat with such decisions are a complete fiasco, and, on the contrary, will lead to the reverse effect."

Banks contacted by Meydan TV said that a request should be sent to the Central Bank regarding the ban.

"We are interested in exchanging currency in the foreign exchange market. Our policy on the foreign exchange market is liberal. At present, there is a surplus, not a deficit in the foreign exchange market", said Central Bank Chairman Elman Rustamov, not commenting further.

For the time being, that means Aygun Mammadova and other Azerbaijanis like her will have to either refrain from exchanging into USD, or resort to other measures.

*Name changed upon request for privacy.

Ana səhifəNewsLawyers and economists call Azerbaijan’s foreign currency exchange limits illegal