Currency panic takes its toll on Azerbaijan: shops, banks closedCurrency panic takes its toll on Azerbaijan: shops, banks closed

A sharp decline in the manat's value following the Central Bank’s decision to abandon its currency peg and float the manat, has prompted retail traders to restrict sales of imported goods, Russia's RBC news agency reported.

News web portal haqqin.az reports that such electronics retail networks as İrshad Telekom, Music Gallery, Baku Electronics are now closed in Baku, due to the fact that the companies have to re-price their products, according to the report.

Grocery stores stopped selling imported products, including those from Russia, Ukraine and CIS countries. The shop owners say they are waiting for further instructions in connection with the weakening of the national currency.

It is reported that the banks have also temporarily suspended money transfers, while many of the currency exchange offices halted forex transactions. Experts warn, many borrowers may face serious problems with servicing their foreign currency loans following the weakening of the national currency.

"Problems may arise with the repayment of dollar-denominated loans," said Chief of the Center for Economic and Social Development Vugar Bayramov.

Rufat Quliyev, Member of the National Assembly of Azerbaijan, assured the government would do everything possible to prevent spike in food prices.

At this, expects do not predict sharp rise in prices on the real estate market in the near future due to the absence of effective demand.

As earlier reported, the Central Bank of Azerbaijan switched to the floating rate of manat from December 21, 2015.

According to the Central Bank, the decision was made taking into account the strengthening of long-term shocks in foreign economy in order to equilibrate the balance of payments, keep the foreign exchange reserves in the country at critical level and ensure the competitiveness of national economy on the global arena.

The manat rate fell to 1.55 per U.S. dollar on Monday, down 47.6% from Friday, according to Reuters.