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September 7, 2018 www.intellinews.com I Page 7
Certainly Georgia’s trade account has been more than robust in the first half of this year with dou- ble-digit growth in exports (28.5% y/y), growing re- mittances from Georgian’s working abroad (18.3% y/y), and impressive tourism inflows (+28.9% y/y) that led to a 5.7% appreciation of the lari against the dollar. The central bank took advantage of
the balmy climate to add an extra $87.5mn to its gross international reserves (GIR) of just under $3bn, and this cushion can now be used to soften the devaluation pressures if needed.
Azerbaijan
Azerbaijan is much more exposed to Turkey’s woes thanks to its hydrocarbon-heavy economy. The government has been on a protracted cam- paign to diversify the economy but the non-oil part remains very small against oil and gas and is more exposed to currency fluctuations.
Moreover, the Turkish crisis will also hit the coun- try’s oil sector, said Azerbaijani economist Gubad Ibadoglu in comments to Eurasianet.
Socar is one of the biggest investors into Turkey having committed $19bn, but this investment is de- nominated in lira so the state-owned oil company has been badly wounded by the lira’s loss in value.
At the same time Baku’s sovereign wealth fund, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) has around 0.9% of its holdings in Turkish government bonds, which have also tanked this year, reports Eurasianet.
And finally Azerbaijan is exposed to the Turkish banking sector via the Turkish subsidiary of Azer- baijan’s Pasha Bank, which issued $25mn in new bonds this June.