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Azerbaijan Money in History

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History of the first series national currency

First independent issue of money of Azerbaijan Democratic Republic, being the first in Muslim world, begins with the banknotes in denomination of 25, 50, 100 and 250 manat put in circulation in 1919. There are words “Azerbaijan government” on the obverse of the banknote, its value and the date of issue are shown in the Azerbaijani language, while the reverse side is given in Russian.

25 rubl 25 rubl

100 rubl

250 rubl

500 rubl

The names of currency issued in 1919-1920 in Azerbaijani were given like “manat”, while in Russian like “ruble”. The main goal here was to gradually increase faith of the population got used to Russian money, in new monetary unit. At the same time economic policy of Azerbaijan Republic in this sphere was to introduce national currency – manat on international area. Exactly because of this and feeling the support of French government (taking into account that the French language being partially an international language), the Republic considered necessary to put the denomination and the name of the Republic in French on the banknote valued 500 manat.

Currencies being in circulation on the territory of Soviet Azerbaijan

Second money emission in Azerbaijan was implemented in 1920 on behalf of Azerbaijan Soviet Socialist Republic (ASSR). In the frameworks of this emission first banknote -1000 ruble (in big format), then 5 (in 2 variations), 100 (in 2 variations) and 1000 (in small format), but in 1921 4 new nominal in new design at a value of 5000, 10000, 25000 (in 2 variations) and 50000 were put in circulation.

Economic depression began in 1920 and covering more spheres in 1922 resulted in devaluation and the decrease of purchasing power made it necessary to issue new money with larger denomination. Thus, in 1922 3 new banknotes in denomination of 100000 (in 3 variations), 250000 (in 2 variations) and 1000000(in 2 variations) were put in circulation. However, this measure couldn’t help to keep the rate of currency stable.

In 1920-23 emission hold in ASSR the value of the banknotes in Azerbaijani were given like manat, while in Russian in ruble. Elements of state attributes, namely “crescent and star”, “hammer and sickle” and the date of issue were shown on all banknotes. Watermarks were used only in some banknotes, namely 25000, 100000, 250000 and 1000000 manat.

By keeping as a basis the original principles for design of issues images appropriate to ideology, i.e. generalized image of a worker and a peasant (on 5, 100, 5000 and 10000 manat), as well as “crescent and star”, “hammer and sickle” and image of coat of arms were used.

Despite the big influence of Soviet Russian, patterns close to national style and ornaments were used for banknotes during Soviet Azerbaijan.

In 1923-24 4 money emissions of Transcaucasian Soviet Federal Socialist Republic (TSFSR) took place on the territory of Azerbaijan. So, for 1st issue rubles at a value of 5000, 10000,50000,10000,250000,500000 and 1000000, for second issue rubles in denomination of 500, 10000, 50000, 10000, 250000, 500000, 1000000, 5000000 and 10000000, for the third one 10000, 25000, 50000, 100000, 250000, 500000, 1000000, 5000000 and 10000000 rubles are included in.

As a result of deepened economical depression and inflation in Transcaucasian republics in 1922-1923, with the decision of TSFSR made in 1924 a million and 1 milliard ruble in denomination of 25, 50, 74, 100 and 250 were put in circulation in the framework of emission.

Just in this period Manat 10 billion banknote has been issued by TSFSR only once in the history of cash circulation.

TSFSR`s banknotes were in circulation in Azerbaijan, Georgia and Armenia. As the rate of Azerbaijani manat among these three republics was higher, it was more valuable than TSFSR ruble.

The designs of all 4 issues of Transcaucasian Federation banknotes ware in the same style. So, on the obverse there was depicted the building of Central Executive Committee of TSFSR in Tbilisi, while the images of “crescent and star”, “hammer and sickle” found their place on the reverse side. The date of issue was shown on all banknotes. The image of a woman and grain, fruit and vegetables beside her were depicted on 1 an 10 billion.

Establishing of Baku branch of the USSR State Bank In 1923 was the start point of the regulation of Azerbaijan banking system by Moscow. In 1936, according to the adopted constitution of the USSR, Azerbaijan was incorporated into the USSR, Azerbaijan branch of the USSR State Bank has operated till 1991 and soviet ruble was an only currency in the territory of the USSR. As in other Soviet Republics, in Azerbaijan cash circulation was organized in centralized manner.

According to the deed of Constitution, adopted in 1936 in connection with names of all 11 republic shown on the State emblem there was indicated on the 11 languages name of the country and denomination on the banknotes, putted into circulation. The banknotes were in circulation till monetary reform in 1947.

In Soviet period there were conducted three monetary reforms (1947, 1961 and 1991). The last one was conducted in 1991 and remained among the people as “Pavlov’s reform”. At that time banknotes of 50 and 100 ruble were withdrawn from circulation during 3 days, reform has a form of confiscation.

After reforms in 1961 1, 3, 5 rubles banknotes were obligations of State Treasury of USSR but 10, 25, 50 and 100 rubles were obligations of State Bank of the USSR.

In this regard, in 1961 were issued coins of 1, 2, 3, 5, 10, 15, 20, 50 gapik and 1 rubl with new design.

First national banknotes (AZM) put into circulation after restoring independence

At the end of XX century, having gained independence Azerbaijan realized one of the important attributes of a sovereign state — putted in circulation national currency. So, the foundation of creating and organizing money circulation in Azerbaijan was lied in the decree of the President of Azerbaijan Republic from February 11 of 1992 “On establishing the National Bank of Azerbaijan” to create National Bank and by the decree of the President of Azerbaijan Republic from July 15 1992 “On put into the circulation the national currency of Azerbaijan Republic” to put national currency into circulation accordingly.

According to this decree in August 1992 banknotes of 1, 10, and 250 manat, in November coins of 5, 10, 20 and 50 gapik, in December banknotes of 5 manat, in March of 1993 paper banknotes of 50, 100, 500 and 1000 manat were put into circulation. First monetary emission of Azerbaijan Republic was printed in 1992 by National Bank of France. New designed 1 and 10 manat banknotes were produced in the same company.

From August 1992 till January 1994 rate exchange rate was as 1 manat = 10 rubles and used in parallel circulation. In the same period became necessary to create condition to bring independence monetary system by National Bank and authorize manat as a single means of payment. From this view, the decree of National Leader Mr. Heydar Aliyev from 11th of December of 1993 “On announce national currency of Azerbaijan Republic as a single means of payment on the republic territory” played important role. By this decree manat become the single means of payment in the circulation and ensure Azerbaijan to exit from ruble zone. So, the National Bank got a chance to accomplish its independence money and rate exchange policy, and positive results of this policy in short time influenced on development of country’s economy.

After establishing by National Leader Mr. Heydar Aliyev State Commission which prepared and conducted on November 12, 1995 by the mean of national wide voting referendum where was accepted with Constitution statement proved once again the right decision to make manat as a single means of payment on the country’s territory. So, according to Article 19 of Constitution of Azerbaijan Republic, manat is the only currency of Azerbaijan Republic and it’s forbidden to use any other currency as means of payment on the territory of Azerbaijan Republic. All these created fertile conditions to stabilize and strengthen rate of exchange of manat and convert it, in the full sense of the word into national currency.

With the purpose to regulate cash circulation in the country and optimized requirement of cash by National Bank there were printed and put into circulation in 1994 banknotes of 10000 manat, in 1996 50000 manat face value.

In 1994 banknotes of 10000 manat face value were produced in Germany by “Giesecke & Devrient” company. On the front size of the banknote there was drawn general view of “Shirvanshahs” complex; on the back side nominal of the banknote was shown in digits and in words, framed with national ornament.

Banknotes of 50000 manat face value were printed in 1995 by English “De La Rue” company and were put into circulation, on the front size of banknotes there were drawn in original style image of the architectural monument “Tomb of Momuna Khatun”, located in Nakhchivan, on the back side nominal of the banknote was shown in digits and in words, framed with national ornament.

In 2001 by English “De La Rue” company there were produced new design banknotes of 1000 manat face value. This banknote dedicated to extracting and refinery oil in Azerbaijan. In design of the banknote there was used national frames and ornament.

In generally, with the purpose to reimburse demand of country’s economy in cash during 1992-2005 by National Bank of Azerbaijan Republic there were released and put into circulation 692,5 million banknotes on the amount 5 trillion 238 billion manat. The notes with old nominal were into circulation till the end of 2006 and within denomination were withdrawn from the circulation.

Denomination and put into circulation banknotes of new-generation (AZN)

In February 7, 2005 there was signed decree of “On changing (denominating) nominal face value of money units and scale of the prices” by the President of Azerbaijan Republic.

According to the decree from 1st January of 2006 due to transition to the new manat 1 new manat equaled to 5000 manats. Manat (AZM) together with new manat remained in circulation during one year – 2006 and only from 1st January of 2007 there was made fully transition to the new manat. But there was no any limitations indicated in exchanging process AZM on a new AZN and even at present time this process in small volumes is being continued.

There were put into circulation new banknotes of 1, 5, 10, 20, 50, 100 and metal coins of 1, 3, 5, 10, 20 and 50 gapik face value.

The main goals during denomination processes and put into circulation new banknotes were following: to form the nominal rate of exchange of manat in accordance with foreign leading currencies of the world, to fit to international standards the design, security, nominal structure of national banknotes, to optimize rate of exchange and scale of prices, to simplify accounting and reporting systems. In the level with this transition to the banknotes of the new-generation provided vividly expression on the new banknotes national and historical traditions, to improve money circulation in country, including saving state expenses in regard with production, carrying, keeping and treatment money.

The President Ilham Aliyev highly estimated the denomination, realizing in country and noted that put into circulation banknotes correspond to the highest international standards was one of the important national projects accomplished in recent time.

The design of banknotes and coins of a new-generation was prepared on the basis of unit conception. The topic of the new money’s design was defined as “Independent Azerbaijan”.

The main conditions of new money design conception, presented to the tender and took into consideration were most modern flows in the world and principles of the “united family”.

Sketches prepared by designer of Austrian “OeBS” company, winner of Euro banknote’s design and author of Euro Mr. Robert Kalina complying with demands and expectations, were selected as winners.

Modern graphic style was the basis in design preparation and expression of ideas, displayed Azerbaijan in all spheres independence, development and integration in Europe family.

Head of the state Ilham Aliyev in connection with design of new-generation banknotes noted: “Manat has very nice design. There have images represented Azerbaijan culture, history, the past, present day and future on the banknotes. I hope during long years, decades this manat will serve to Azerbaijan people and citizens, our country will become richer and Azerbaijan economy will develop as well”.

The technician parameters of new-generation notes were prepared by technical assistants of National Bank of Switzerland. The quality of banknotes was corresponding to the highest international standards and was defined in compare with level of banknotes of leading countries. So, producing of banknotes was accomplished according ISO requirements, both before and after producing the quality of the banknotes one by one were checked on the special automatic equipment.

Intensive development of computer and photocopy technologies in modern time, and at the same time technologies using in banknote’s security and use security elements in various fields increases probability of forgery. Just by these reasons the actuality for applying on a banknotes new and modern security elements and special security systems was gradually increasing. The main factor to prevent success of forgeries characterize ability of population fully determine security elements on the banknotes. In this case the main goal of National Bank consists of creating new and tradition technologies combination and closely acquaints society with them.

Taking all these into consideration Azerbaijan manat’s security system was made as a result of close cooperation with Swiss National Bank according to special “security philosophy”. So, banknotes of new-generation have 4 level security systems. I level determine by population without any special equipment, II level determines by commercial enterprises with simple devices, III level determines by banks by special equipment and IV level determines only by Central Bank. The main goal is to enlighten population how to distinguish fake banknotes from real.

We would like to note, in contradistinction to old-generation bills there ware used optic change and other modern security elements.

The decree signed by President of Azerbaijan Republic from February 7 2005 “On change (denominate) in Azerbaijan Republic nominal of banknotes and scale of prices” beginning from 2006 banknotes put into circulation in 1992-2001 were withdrawn from circulation. Old banknotes (AZM) independently from its face value are changing by Central Bank of Azerbaijan Republic and its organizations without any limit and time period.