AZE.US
Demand for foreign currency has fallen sharply in Azerbaijan, with dollar sales at currency auctions dropping by about 72% in the first half of 2026 compared with the same period last year.
The Central Bank of Azerbaijan sold $757 million through currency auctions during the first six months of the year, according to figures reported by Baku TV.
Sales totaled $2.7 billion during the same period in 2025 and $3.7 billion in the first half of 2024. Supply on the foreign-exchange market exceeded demand by more than $500 million this year.
Central Bank Chairman Taleh Kazimov said 34 currency auctions had been planned for the second quarter, but 23 did not take place. No auctions were held in May.
Economists point to growing confidence in the manat and reduced expectations of another devaluation as possible reasons for the decline in dollar demand.
The share of foreign-currency deposits in Azerbaijan’s banking system has fallen to about 25%, its lowest level in the country’s recent economic history. Five or six years ago, dollar deposits accounted for approximately 40% of total deposits.
The decline has coincided with a doubling of manat-denominated deposits, suggesting that more customers are choosing to keep their savings in the national currency.
Lower imports are another major factor. The value of goods imported into Azerbaijan fell 27.8% in the first half of 2026 compared with the same period a year earlier, reducing the amount of foreign currency needed by businesses to pay overseas suppliers.
Economist Khalid Karimli said the figures could indicate a more balanced currency market. However, they could also signal weaker import and investment demand from the private sector.
He said indicators including non-oil exports, imports, capital investment and bank lending should be monitored over the coming months to determine whether the decline in currency demand reflects financial stability or slowing economic activity.
Despite the sharp drop in foreign-currency sales, Azerbaijan’s strategic reserves reached $85.8 billion in the first half of 2026. The total increased by $700 million, or 0.8%, from a year earlier.
AZE.US