Azerbaijan devalues manat by nearly 50 percent

Oil-rich Azerbaijan has let its currency float freely, leading to its sharp depreciation as global oil prices hit new lows.

According to the offical fixing from the central bank, the country´s currency, the manat, plunged 47.6% on Monday to stand at 1.55 versus the United States dollar. If you would like to discuss another topic, look for a relevant article.

Azerbaijan has burned through more than half of its central bank reserves to defend the currency after the manat was allowed to weaken about 25 percent in February.

Taxes from oil and gas represented approximately three-quarters of the country´s revenues.

"The central bank has chose to switch to a floating manat rate from December 21", it said in a statement. "Based on that, the manat rate will be determined by demand and offer on the forex market". Countries in Russia's orbit - including Kazakhstan, which set its currency loose in August - are finding it increasingly hard to resist the gravity of the larger country's recession.

Baku's decision followed similar moves by crude exporters Russian Federation and Kazakhstan and underscored the pressure that low prices are exerting on the public finances of oil-dependent countries in the former Soviet Union. It earlier abandoned the manat's dollar peg and adopted a dollar-euro basket to manage the exchange rate.