21/01/2016
NEWS STORY
Organisers of the forthcoming Baku European Grand Prix, which is to be held on the streets of the Azerbaijan resort, have refuted media claims that the current slump in oil prices threatens the event.
In recent months, due to a supply glut oil prices have fallen to a record low resulting in a knock-on effect on currencies around the world including Venezuela, hence some of the speculation regarding PDVSA in recent weeks.
With oil production accounting for around 75% of Azerbaijan's income, the value of the local currency (the manat) has dropped by around a third, compared to the dollar, consequently its central bank has used up around half of its foreign currency reserves in an attempt to protect the oil price.
"The devaluation of the manat will have no impact with regards to the staging of the first ever Formula One race in Azerbaijan," said Baku City Circuit in a statement. "When the budget for the Grand Prix of Europe was approved, it was initially calculated in U.S. dollars. As a result, we are not expecting any changes to the current event budget.
"BCC shares the concerns of everyone at the current devaluation of our national currency. BCC also accepts that staging such a major event requires a significant financial outlay," race organisers said.
"However, we would once again stress that the overall economic impact, both short- and long-term, direct and indirect, created by staging an F1 race will be of huge benefit to the national economy.
"The impact of increased tourism and direct visitor spending that will be injected into Baku area business establishments such as restaurants, bars, hotels and retailers will see millions, if not more, pumped into the economy."
To add to Baku's woes, the event was always likely to be a loss maker, the maximum capacity at the street circuit around 28,000.