BAKU (RFE/RL) — The Central Bank of Azerbaijan (CBA) has abruptly devalued the country’s currency against the dollar and the euro.

The official rate for the manat was set on February 21 at 1.05 to the dollar and 1.19 to the euro.

It means the manat lost 33.5 percent and 30 percent of its value against the U.S. and European currencies, respectively.

The CBA said the devaluation was aimed at “stimulating the diversification of Azerbaijan’s economy, strengthening the international competitiveness of the economy and its export potential, and guaranteeing stability in the balance of payments.”

Azerbaijan has been hurt by the sharp decline in the price of oil, the country’s main export.

The devaluation raises fears of a spike in inflation because it will make imports more expensive.

The decision is also expected to sharply increase the domestic demand for dollars and euros.

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