Over the past month since the beginning of the year, the Russian national currency, the ruble, has rapidly strengthened against the US dollar.
Yeniavaz.com reports that at the beginning of January, one dollar cost 108 rubles, and today it has fallen to 98 rubles.
As you can see, over the past month, the ruble has strengthened by more than 9 percent against the dollar.
Since the exchange rate of the national currency of Azerbaijan, the manat, has remained stable against the US dollar, the ruble has strengthened against the manat by about the same level.
If at the beginning of January, 1 manat cost 63 rubles, now it has fallen to 58 rubles.
But how can the strengthening of the ruble against the dollar in Russia, one of the main trading partners of Azerbaijan, affect the economy of Azerbaijan?
The strengthening of the national currency in Russia, the main trading partner of Azerbaijan, can further increase exports to this country.
According to the latest data from the Customs Committee, products worth $1.178 billion were exported from Azerbaijan to Russia last year. Excluding crude oil, which we exported to Italy, Russia was the second largest export destination for Azerbaijan after Turkey.
The weakening of the manat against the ruble will increase profits from exports to Russia. For example, we sell 1,000 kilograms of apples to Russia and earn 80,000 rubles there. A month ago, when we converted this amount into dollars, it was $741, and now it is $816. As you can see from the figures, the profit we would have made from purchasing 1,000 kilograms has increased by more than 10 percent due to the change in the exchange rate.
The downside of a stronger ruble for the Azerbaijani economy is that prices for products imported from Russia to Azerbaijan will increase. A 10 percent appreciation of the ruble against the dollar may lead to an increase in prices for imported products by approximately the same amount.
However, it should also be noted that although the growth of import inflation has negative consequences in the short term, it also has advantages in the long term. Growing import inflation creates opportunities for domestic producers. Because such a situation facilitates competition with increasingly expensive imported products and can spur the expansion of domestic production.
The strengthening of the ruble against the dollar and manat will also benefit our compatriots who work in Russia and send money to Azerbaijan. The change in the exchange rate will be beneficial to those who receive their salaries in rubles and send them to Azerbaijan. The strengthening of the ruble will increase the real income of our compatriots working in Russia. For example, if a month ago our compatriot, who earned 10,000 rubles in Russia, converted them into manats and got 159 manats, now this amount will be 172 manats.

Elnur Ali