AZN - Azerbaijani Manat

The History of the Azerbaijani Manat

The term “manat” originates from the Latin word “monēta” and the Russian word “монета” (“moneta”), both meaning “coin.” It was used to refer to the Soviet currency in both the Azeri and Turkmen languages. The Azerbaijani Manat has undergone three significant phases of development in its history:

First Manat (1919-1923)

From the year of 1919 to 1923, the Azerbaijan Democratic Republic and the Azerbaijani Soviet Socialist Republic after that issued their own currency called the manat in Azerbaijani and ruble in Russian. 

The denominations on the banknotes were written in both languages, and sometimes in French. The manat replaced the first Transcaucasian ruble at face value and was later replaced by the second Transcaucasian ruble when Azerbaijan became part of the Transcaucasian Soviet Federal Socialist Republic.

Second Manat (1992–2006)

In 1992, after Azerbaijan's declaration of independence, the Manat was introduced to replace the Soviet ruble (SUR) after the dissolution of the Soviet Union.

Although the Manat experienced high inflation and devaluation against other foreign currencies during this period, it marked a crucial milestone, laying the foundation for the independent financial system of Azerbaijan.

Third Manat (2006–Present)

On January 1, 2006, Azerbaijan introduced the second version of the Manat, known as AZN, replacing the old AZM with a conversion rate of:

1 Manat (AZN) = 5,000 Manat (AZM)

The design of the current Manat incorporates various cultural, historical, and economic elements of the nation. The designer of the Manat is renowned artist Robert Kalina, who also designed the Euro. 

Azerbaijani Manat denominations

Azerbaijani Manat (AZN) comes in coins and banknotes with the following denominations

Banknotes

• 1 manat: Culture themed with Azerbaijani folk music instruments

• 5 manat: Writing and literature themed with the image of Azerbaijani writers, poets, and books

• 10 manat: History themed with Old Baku

• 20 manat: Karabakh themed (Karabakh is a region in southwestern Azerbaijan)

• 50 manat: History and future themed with symbol of youth and progress

• 100 manat: Economy and development themed with architectural symbols from antiquity

• 200 manat: Modern architecture themed with the image of Heydar Aliyev Center, Baku

200 manat was issued in 2018. Other denominations were issued in 1992. With Robert Kalina being the designer behind Azerbaijani Manat banknotes, the notes look quite similar to the euro with inspiration from the euro note.

Coins (qəpik)

Azerbaijani Manat coins are denominated as 1 Manat, divided into 100 qəpik. They include the following denominations:

• 1 qəpik

• 3 qəpik

• 5 qəpik

• 10 qəpik

• 20 qəpik

• 50 qəpik

For the observe of the coin, it features the Map of Azerbaijan, country name and the coin’s value. On the reserve, there are many significant symbols of Azerbaijan culture, namely the country’s traditional musical instruments, books and quill, the Maiden Tower, and so on.

What factors affecting Azerbaijani Manat’s value?

The exchange rate of the Azerbaijani Manat is relatively stable compared to foreign currencies such as the USD or EUR at the current time.

1 AZN ≈ 0.59 USD

1 AZN ≈ 0.56 EUR

However, the value of the Azerbaijani Manat fluctuates over time, depending on national and global economic and political conditions. 

Here are the main factors that influence the value of the Azerbaijani Manat:

• Oil and Gas Prices: Azerbaijan is a major exporter of oil and gas. Therefore, if the prices of these energy resources increase, the value of the AZN will increase. Conversely, if oil prices drop, the Manat will eventually lose value.

• Trade Balance: If the country's exports exceed imports, the resulting trade surplus benefits the value of the Manat. On the other hand, a trade deficit puts major pressure on the AZN's value.

• Foreign Exchange Reserves: The Central Bank of Azerbaijan maintains foreign exchange reserves to protect the value of the Manat. These reserves are primarily bolstered by oil revenues.

• Exchange Rates: Fluctuations in the exchange rate between the AZN and other currencies, especially the USD and EUR, affect the Manat's value. When the USD strengthens, it can lead to imported inflation and impact the value of the AZN.

• Inflation Rates: Inflation in Azerbaijan can also influence the Manat's purchasing power. Higher inflation may lead to a depreciation of the currency.

• Monetary Policy: Decisions made by the Central Bank concerning interest rates and monetary policy can have a considerable effect on the value of the Manat. For instance, raising interest rates can attract foreign investment, which in turn may strengthen the currency.

With the backbone of the Azerbaijani economy being petroleum, Azerbaijan is regarded as one of the world's key regions for oil exploration and development. As Azerbaijan is heavily reliant on oil exports, there is a strong correlation between oil prices and currency value. A rise in oil prices can strengthen the manat, while a decline can lead to depreciation, affecting the broader economy as well.

Another factor that may impact the value of the Azerbaijani Manat is political stability. Under the leadership of Ilham Aliyev, the country has experienced significant economic development, supported by its oil wealth. This stability fosters investor confidence, which positively influences the Manat’s standing in the market. As a result, the Azerbaijani Manat benefits from a favorable perception among investors, reinforcing its value.

In conclusion, any changes in oil prices or the economic situation can significantly affect the value of the Azerbaijani Manat on the international market.