Manat plunges against the dollar as Baku depegs and oil prices hit new low

The US dollar rose 48% against Azerbaijan’s manat this morning as the country’s central bank floated the country’s currency.
The manat had been pegged to the dollar since mid-2011, and the move has been on the cards since February when the bank’s  governor Elman Rustamov  told the Financial Times that the low price of oil was straining its energy-dependent economy.
“It is critical to make some ….corrections to fiscal and monetary policy,” he said at the time. “We consider that we should transit to a more flexible exchange rate and gradually we will transit to an inflation-targeting regime.”
Oil and gas account for 95% of the country’s exports and 70% of government revenues. On Monday, the price of Brent crude hit a new 11-year low, fetching just $36.18 per barrel, almost 50% below tits 2015 peak in May.
In August, Kazakhstan’s central bank also decided to depeg its currency, the tenge, from the dollar. Since then it has lost  85%  of its value and last month the central bank  was obliged to introduced a new 20,000 tenge note.

Source: FT