In the first half of 2024, Azerbaijan's currency market witnessed a substantial increase in transaction volumes, with a total of $20.2 billion processed. This marks a notable 32.9% increase compared to the same period last year, reflecting both a growing economy and heightened market activity.
The increase in transaction volumes is attributed primarily to non-cash transactions, which totaled $17.8 billion. This segment experienced a rise of approximately 32.8% compared to the first half of 2023. On the other hand, cash currency transactions amounted to $2.4 billion, reflecting a growth of 33.3% over the same period.
In the non-cash currency market, the US dollar remains the dominant currency, constituting 81% of the transactions. This highlights the continued preference for the dollar in non-cash dealings, likely due to its global stability and the economic relationships between Azerbaijan and dollar-based economies. Conversely, other currencies combined account for 19% of non-cash transactions.
Cash currency transactions also reflect a strong preference for the US dollar, with 87.5% of these transactions being in dollars. The remaining 12.5% of cash transactions involve other currencies, indicating a relatively minor but present diversification.
The sharp increase in both non-cash and cash transactions signals a robust economic environment in Azerbaijan. The rise in transaction volumes suggests increased economic activity, potentially driven by higher trade volumes, foreign investment, or an uptick in domestic consumption.
The dominance of the US dollar in both non-cash and cash transactions underlines its pivotal role in Azerbaijan's currency market. This may reflect the country’s economic ties with the US or its involvement in dollar-dominated international trade. The slight use of other currencies in transactions could indicate a gradual diversification but with the dollar still being the preferred choice.
Azerbaijan's currency market has experienced a significant uptick in transaction volumes in the first half of 2024, driven by both non-cash and cash transactions. The overwhelming preference for the US dollar in these transactions underscores its central role in the country’s financial system. This trend not only reflects Azerbaijan's growing economic activity but also highlights its strong alignment with dollar-based financial practices. As the year progresses, monitoring these trends will be crucial for understanding the broader economic landscape and the implications for future monetary policy and economic stability in Azerbaijan.
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