BAKU, Azerbaijan, July 3. The monetary policy
of the Central Bank of Azerbaijan (CBA) builds on a balanced and
sustainable approach, Executive Director of the CBA Rashad Mammadov
told Trend in an
exclusive interview.
According to him, in the age of digital transformation, the
future of the national currency, the concept of new generation
banknotes, the optimization of cash circulation, and the importance
of investment banknotes are increasing.
He answered questions about the security systems of national
banknotes, updated denominations, and strategic goals.
The executive director said that in an era of rapid development
of digital payments, the CBA's cash policy is based on a balanced
and sustainable approach.
"International experience, in particular the approach of the
European Central Bank, shows that cash is an integral part of the
financial system and, although its role has been transformed, its
importance remains. In this regard, the main priorities of the
Central Bank in the field of cash are concentrated in several
directions:
- Ensuring accessibility to cash - preserving the ability of the
population and business entities to obtain cash at any time; - Optimization of cash circulation - reducing logistics,
processing, and storage costs, modernization, and automation of
cash infrastructure; - Renewal of national banknotes - further improvement of the
security elements of banknotes according to modern standards and
renewal in terms of design; - Strengthening the resilience of payment systems - maintaining
the role of cash as an alternative means of payment in the event of
technological risks and emergencies; - Expanding cooperation with the banking sector - developing more
effective models in the field of cash processing and recirculation
application.
Analysis of the nominal structure, improvement of the quality of
money in circulation, improvement of regional distribution
mechanisms, and application of technological solutions will be
among the main directions," he explained.
Mammadov also spoke about the resistance of the national
currency's security systems to counterfeiting methods.
According to him, recently, photos of banknotes made in various
designs and denominations, mainly through artificial intelligence
applications, have been circulating on social networks, causing
confusion among the population.
"As we have stated in the inquiries received by the Central Bank
on this issue, such information isn't true. We ask to refer to the
Central Bank's website and social media pages as the official
source of information on changes in national banknotes.
Information on banknotes in circulation is posted on the
official website of the Central Bank. Public information about the
updated banknotes or any changes to existing banknotes is organized
by the Central Bank through the official website of the Central
Bank and social media pages before their release into circulation.
One of the latest changes was the release of the updated 50-manat
banknote into circulation in December last year. On July 15 of this
year, the updated 100-manat banknote is planned to be released into
circulation.
According to the analyses, it's observed that counterfeiting
methods are most often carried out using primitive methods (color
copying or scanning). Such counterfeit money is easily identified
by bank employees or equipment. As a result of the high technical
indicators of national banknotes and the reliability of security
elements, the level of counterfeiting of national banknotes is
considered significantly lower compared to the leading currencies
of the world and the currencies of neighboring countries.
Mammadov recalled that the "Independent Azerbaijan" concept,
which was implemented after the denomination in 2006, is
celebrating its 20th anniversary. In this regard, the executive
director said that the national currency of Azerbaijan, which is
currently in circulation - the manat - was released into
circulation in 2006, dedicated to the theme of the "Independent
Azerbaijan" concept.
"The liberation of our lands from occupation and the restoration
of the territorial integrity and sovereignty of Azerbaijan have
conditioned our country to enter a new political and economic level
in the region and the world. This, in turn, has brought to the
agenda the issue of adapting our national currency, which is one of
the main statehood attributes, to the new era and challenges. The
Central Bank has conducted a public survey in 2024 to determine the
concept theme of the new generation of national currency and
subthemes for denominations, and at the next stage, it's planned to
begin work on the creation of currency designs and their security
systems in the new concept. According to international practice,
work on the creation of a new concept is carried out by central
banks for approximately 2 to 4 years. Information about any changes
will be presented to the public in advance by the Central Bank," he
said.
Mammadov also shared the results of the transfer of the service
of exchanging unusable banknotes directly to operator banks (ABB,
Kapital Bank). He noted that in order to increase the accessibility
of this service to the population, the exchange of national
banknotes has been provided by the branches and departments of the
operator banks: International Bank of Azerbaijan and Kapital Bank
OJSCs operating in the country since March of this year.
"Currently, all branches and departments of these banks fully
meet the requests of the population. It should be noted that this
service is provided free of charge. This change, by giving citizens
the opportunity to choose, also helps them save time and use the
service promptly," the official noted.
Interest in investment banknotes is growing against the backdrop
of the price volatility observed in the precious metal markets in
recent times. The executive director answered a question about the
advantages of investment banknotes put into circulation by the CBA,
as well as the mechanisms for their sale and redemption.
"On the occasion of the 100th anniversary of the birth of the
National Leader Heydar Aliyev, the Central Bank, for the first time
in 2023, issued investment banknotes made of high-quality gold and
designed by local experts in various weights: 1 troy ounce, 1/2
troy ounce, 1/4 troy ounce, and 1/10 troy ounce. These banknotes
are considered legal tender in the territory of Azerbaijan at their
nominal value.
The wide range of options for investment banknotes presented in
various weights, as well as the presence of an effective redemption
mechanism, create favorable conditions for the efficient
organization of the circulation of these instruments and the wider
spread of their use. In order to increase the accessibility of
investment banknotes to the population, the implementation of sales
and redemption operations through sales agents is aimed at
increasing the efficiency of services and ensuring transparency of
the process," he clarified.
Mammadov pointed out that currently, the sale and redemption of
these banknotes is organized through Turan Bank and Bank of Baku
OJSCs, which were designated as sales agents by the CBA.
"Expertise is organized on the investment banknotes redeemed by
sales agents, and the value of the banknotes redeemed from citizens
is paid on the same day. The points I have mentioned increase the
attractiveness of investment banknotes as a reliable investment
instrument, and also serve to expand the population's gold-based
savings and investment opportunities," the CBA official
concluded.
