Azerbaijan’s manat is navigating a landscape increasingly defined by robust capital inflows and a positive balance of payments, setting the stage for potential currency appreciation against the US dollar. Recent data for the first half of 2025 reveals a consistent trend of net gains in both direct foreign investments and remittance inflows, complemented by a favorable trade balance. These economic signals suggest that the manat may experience underlying strength, independent of broader geopolitical or energy market considerations.

During the first six months of 2025, Azerbaijan attracted a total of $3.22 billion in foreign direct investment (FDI). In comparison, outbound direct investments from Azerbaijan totaled approximately $1.35 billion, resulting in a net inflow of $1.87 billion. This net positive in FDI is a crucial driver of demand for the local currency, as foreign investors convert dollars into manats to fund projects, purchase assets, and engage in economic activity within the country. The magnitude of these inflows reflects sustained international confidence in Azerbaijan’s investment landscape, even when evaluated in isolation from........

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