PRESIDENTIAL DECREE OF THE AZERBAIJAN REPUBLIC

of February 7, 2005 No. 189

About change of nominal value of bank notes and standard of price (denomination) in the Azerbaijan Republic

As a result of performed in recent years in the Azerbaijan Republic of purposeful economic policy and large-scale reforms dynamic development of economy, including macroeconomic stability is reached, the investing in all industries considerably increased, the population conduct of life improved, the rate of inflation was limited, rate stability of manat in relation to foreign convertible currencies is provided.

It is known that the national currency rate, the state independence released in the Azerbaijan Republic in the first years, for a short time sharply fell under the influence of the military-political and social and economic crisis and in the country which happened during this period high standard of price was created. Despite success in social and economic development of the country achieved since 1996 the created high standard of price and the low nominal rate of manat are caused by difficulties in case of creation of accounting and reports in accounting system and statistics, conducting interdepartmental and bank calculations, install in the population, in particular, business people, uncertainty in national currency. Though today the economy of Azerbaijan on the dynamic development is among leaders among many countries of the world, including countries of the Commonwealth of Independent States, the manat rate in relation to foreign currencies remains low.

Considering that rapid growth and potential of development of economy create favorable conditions for forming of rate of the manatanatsionalny currency which is the state attribute of the Azerbaijan Republic at the level corresponding to exchange rates of the leading currencies of the world and for the purpose of reduction of design, protection, nominal structure of national bank notes in compliance with international standards, more evident expression in bank notes of national and historical traditions, further improvement of currency circulation in the country, optimization of scale of rate and the prices, I decide ensuring more effective implementation of functions of manat, simplification of accounting and settlement system and economy of the public expenditures:

1. Since January 1, 2006 to perform denomination of national currency manat in the Azerbaijan Republic. Upon transition to new manat 1 new manat is equated to 5000 old manats.

2. From January 1 to December 31, 2006 bank notes of old sample as legal means of payment are accepted in the address along with new bank notes during the implementing of all payment types, acceptance into accounts and for money transfers, and also change banks without restriction. And since January 1, 2007 old bank notes irrespective of the amount without restriction and term change the Central bank of the Azerbaijan Republic and its structures, and also all banks (branches, departments) functioning in the Azerbaijan Republic.

3. Charge to all state bodies and the organizations, and also economic subjects, irrespective of pattern of ownership, to take necessary measures for the translation until the end of 2005 of the corresponding indicators expressed in the amount concerning the sphere of their activities on new standard of price and to provide since January 1, 2006 calculation and data application of indicators in new scale.

4. Charge to the Ministry of Economic Development of the Azerbaijan Republic and the Ministry of Finance of the Azerbaijan Republic to provide preparation of indicators of social and economic development of the country and the draft of the government budget for 2006 in the new scale of manat.

5. Determine that:

* from October 1, 2005 to December 31, 2006 the prices and rates in price labels on implementable goods and in price lists of the prices for the services and the offered works rendered to the population are specified at the same time in old and new scale;

* replacement with the banks of bank notes of old sample functioning in the territory of the Azerbaijan Republic by bank notes of new sample is performed without deduction of commission payment.

6. Charge to the Ministry of taxes of the Azerbaijan Republic and the Ministry of Economic Development of the Azerbaijan Republic to exercise control of the correct specifying of the prices and rates in price labels on implementable goods, price lists of the prices for the services and the offered works rendered to the population according to this Decree and in case of violation of this requirement to take the measures established by the law.

7. To Central Bank of the Azerbaijan Republic:

* taking into account provision of Item 1 of this Decree and in coordination with the President of the Azerbaijan Republic to take measures for release into the stream of commerce of new bank notes, including metal coins, to provide production and delivery to the country until the end of 2005 and release into the stream of commerce since January 1, 2006 of the new bank notes which are based on the concept of single design, strong remedies and modern international standards;

* perform necessary measures for transition bank and payment system on new standard of price;

* exercise control of replacement of bank notes of old sample with banks by bank notes of new sample without deduction of commission payment and accept the measures established by the law concerning violators of this procedure.

8. To the Cabinet of Ministers of the Azerbaijan Republic:

* discuss in Committee of monetary reform of measure for implementation of denomination of national currency and accept the relevant resolution;

* together with the relevant state bodies to perform the necessary organizational and coordination measures following from this Decree;

* to quarterly inform the President of the Azerbaijan Republic in connection with execution of this Decree.

9. This Decree becomes effective from the date of publication.

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