Expert Opinion cdr

National Currency
The national currencies of all three South Caucasus countries have 
experienced devaluation over the last 10 years. In Georgia, compared 
to 2012, in 2022, the average annual value of the Georgian Lari against 
the US Dollar depreciated by 76%, the Armenian Dram by 8.4%, and the 
Azerbaijani Manat by 115%.
Georgia and Armenia both employ a floating exchange rate regime, 
which means that the value of the national currency is determined by the 
demand-supply factor on the market. Consequently, regional economic 
fluctuations and the global macroclimate directly affect them. Until 2015, 
Azerbaijan had a fixed exchange rate operating for its national currency, the 
Manat. However, on December 21, 2015, the Central Bank of Azerbaijan 
announced the transition to a floating rate, a decision, they said, which was 
based on the sharp reduction of foreign exchange earnings in the country’s 
economy, which in turn was caused by the drop-in oil prices. As a result, 
the value of the Manat against the US Dollar increased from 1.05 to 1.56 
between 2015 and 2016. In the last 10 years, the highest average annual 
exchange rate of the Manat was recorded in 2017, at 1.72, after which its 
value against the US Dollar stabilized at 1.70 Manats (Bloomberg, 2015). 
This stability gives us reason to assume that the Central Bank of Azerbaijan 
is still actively controlling the exchange rate and is not allowing it to float.
Graph 1.6 shows the values of the national currencies of the South Caucasus 
countries over the last 10 years. Following the significant devaluation of 

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the Georgian Lari and the Armenian Dram, their value has strengthened 
relatively since 2021, while the Azerbaijani Manat has been stable at 1.70 
since 2017.
Graph 1.6
Source: National Statistical Offices and National Banks of Armenia, Azerbaijan and Georgia
Table 1.1 shows the average annual numerical values of the national 
currencies of the South Caucasus countries against the US Dollar. The 
dynamics of the strengthening of the Georgian Lari and the Armenian 
Dram are largely related to the lifting of pandemic regulations, tourism 
restoration, the growth of remittances and the inflow of foreign currencies,