(Adds state sector pay increase)
By Nailia Bagirova
BAKU Jan 18 Azerbaijan's President Ilham Aliyev
has ordered measures to support the economy and ailing manat
currency, including a possible tightening of currency controls,
help for banks, and a sell-off of state assets, state television
reported on Monday.
The manat has lost 33 percent of its value against
the dollar in the past month and the country has burned through
more than half its foreign currency reserves trying to defend it
against the effect of falling oil prices.
Speaking at a meeting of the government, Aliyev said
parliament would convene in an extraordinary session on Tuesday
to debate government proposals to strengthen regulations on the
currency market, state TV reported.
There were no details on which regulations would be
tightened, but the parliamentary session's agenda for Tuesday
includes items on regulating the currency market, insurance of
deposits and several changes to the tax and administrative
codes. Parliament is dominated by Aliyev loyalists.
Aliyev said the government had prepared a large-scale
privatisation plan with the participation of local and foreign
experts, while proposals on the recovery of problematic banks
were also under consideration.
He said that measures on deposit insurance and the issuance
of state bonds would also help to support the currency. He also
signed a decree on increasing the salaries of state employees by
10 percent from Feb. 1. The average salary in Azerbaijan is 460
manats a month($287).
The State Oil Fund of Azerbaijan (SOFAZ) sold a total of
$193.9 million on the foreign exchange market on Monday in a bid
to prop up the weakening manat.
It was the fund's third intervention this year. It has sold
$539.9 million in total so far, while $100 million was sold by
the country's central bank.
Azeri state oil company SOCAR said it had offered to buy
back its outstanding Eurobonds worth up to $500 million and
maturing in 2017.
The cost of borrowing for Azerbaijan's government has gone
up as investors perceive the risk of holding the country's
assets to have increased. Buying back the Eurobonds could save
Azerbaijan money in the longer time.
(Writing by Margarita Antidze; Editing by Jeremy Gaunt)