Azeri Central Bank Raises Main Rate to 15% in Emergency Increase

(Bloomberg) -- The Azeri central bank raised its main interest rate for the fourth time this year to the highest since 2008 as it struggles to restore trust in the national currency after two devaluations in 2015.

The benchmark was increased to 15 percent from 9.5 percent, effective on Sept. 14, according to an e-mailed statement on Friday. The upper end of its rate corridor will increase to 18 percent and the lower bound will rise to 12 percent, it said.

The former Soviet Union’s third-largest crude exporter is in the grip of a fresh currency crisis after the manat lost about half its value against the dollar last year. Many banks halted foreign-currency sales in the past several weeks as demand rose and the manat continued to depreciate.

The central bank has burned through more than two-thirds of its reserves to defend the manat last year before loosening the reins on the exchange rate after oil prices collapsed. It suffered the biggest drop among all currencies in 2015 when it lost about half its value against the dollar, according to data compiled by Bloomberg.

The manat is the second-worst performer against the dollar this quarter among ex-Soviet currencies, having weakened 7 percent.