Azerbaijan's declaration of independence in the late 20th century led to the introduction of the national currency, symbolizing a key aspect of a sovereign state.

Azerbaijan entered the era of modern central banking in 1991. Article 14 titled “The Banking System and Money Circulation” of the Constitutional Law of the Republic of Azerbaijan dated 25 May 1991 stipulated the legal basis for the independent banking system and circulation of the national currency in Azerbaijan, determined the status and authorities of the National Bank. The National Bank was declared a supreme emission agency that pursued the state policy in lending, money circulation, settlements, and foreign exchange relations, regulating the overall performance of the banking system and discharging reserve bank functions. The first law regulating the activities of the National Bank – the “Law on the National Bank of the Republic of Azerbaijan” was adopted on 7 August 1992 and the “Resolution on Approval of the Charter of the National Bank of the Republic of Azerbaijan” was passed by the Milli Majlis of the Republic of Azerbaijan on 1 December 1992.

The establishment and organization of currency circulation in the country began with the introduction of the national currency into circulation through the Decree issued by the President of the Republic of Azerbaijan on July 15, 1992, titled "On the introduction of the national currency of the Republic of Azerbaijan into circulation". On August 15, 1992, the Republic of Azerbaijan introduced new national currency denominations including 1, 10, and 250 manat banknotes. In November of the same year, coins of 5, 10, 20, and 50 gapiks were released. In December, a 5-manat banknote was issued, followed by paper notes in denominations of 50, 100, 500, and 1000 manat in March 1993.

The national leader Heydar Aliyev issued a decree on December 11, 1993, declaring the Republic of Azerbaijan’s national currency as the sole legal tender in the country. This decision established the manat as the only form of payment in circulation, marking Azerbaijan's exit from the ruble zone. The Central Bank was granted the authority to implement an independent monetary and exchange policy. The State Commission, led by Heydar Aliyev, announced that the manat would be the country's exclusive means of payment starting from January 1, 1994. This decision was reaffirmed in a Constitutional Act passed during a national referendum on November 12, 1995.

Higher denomination banknotes of 10,000 and 50,000 manats were introduced in 1994 to manage cash circulation and meet demand for cash. However, the global economic crisis in 1999 caused the value of the national currency to weaken once more, a trend that persisted until 2004. The 10,000-manat banknote produced by Giesecke & Devrient company in Germany in 1994 featured a panoramic view of the Shirvanshahs’ Palace Complex. The reverse side of the note displayed the denomination in numerical and written form, enclosed within a traditional frame adorned with national ornaments. The 50,000 manat banknotes printed by the England-based company De La Rue were released in circulation in 1996. These notes featured the Momina Khatun Tomb architectural monument in Nakhchivan on the front in the original style, and the back displayed the denomination value in numbers and words within a traditional national ornamented frame.  The De La Rue company released a 1000 manat banknote in 2001 with a fresh new design dedicated to Azerbaijan’s oil extraction and production industry. The design of this banknote incorporated traditional frames and ornaments.

Under the leadership of President Ilham Aliyev, our republic has embarked on a new phase of economic reform since 2004. Economic and political stability attained in the country during this period has paved the way for a new Monetary Reform on the national currency at the macroeconomic level.

On February 7, 2005, the President of the Republic of Azerbaijan issued a Decree on "Changes to the Nominal Value of Monetary Units and the Scale of Prices (denomination)", initiating the denomination process of our national currency, which had greatly depreciated in previous periods. Starting in 2006, new banknotes in 6 denominations and coins in 6 denominations were introduced into circulation, with 1 new manat equivalent to the 5,000 old manat.

The new generation banknotes of Azerbaijan, created by Robert Kalina, the famous designer of Euro banknotes, are inspired by the concept of "Independent Azerbaijan". Reflecting our country's progress across various sectors, the banknotes are themed around the principle of "One Family" with each denomination dedicated to specific topics: 1 AZN - Culture, 5 AZN - Writing and Literature, 10 AZN - History, 20 AZN - Karabakh, 50 AZN - Education and Future, and 100 AZN - Economy and Development.

A new 200-manat banknote was introduced into circulation on May 23, 2018, to guarantee sufficient payment options in response to the country’s rapid economic growth and evolving cash circulation trends. The banknote's design features the Heydar Aliyev Center, named after the great leader Heydar Aliyev and renowned as one of the world's most contemporary architectural marvels.

In early 2021, the Central Bank introduced new banknotes of 1, 5, 10, 20, and 50 manats to improve security features and design in response to modern global challenges and technological advancements in cash and counterfeit prevention. These new banknotes are now in circulation alongside the old ones. Besides paper banknotes, modifications have also been implemented in the design of our metal 10, 20, and 50 gapik coins.

Following the regaining of our state independence, the Central Bank introduced jubilee and commemorative banknotes in addition to circulating money.

This collection of 58 coins celebrates the legacy and customs of statehood, culture, and art, while also paying tribute to important figures and events in our country's history. These coins have garnered a loyal following from the public and collectors alike, nationally and globally. A 500 manat 'ZƏFƏR' (VICTORY) commemorative banknote and silver and gold 'ZƏFƏR' commemorative coins have been issued to commemorate the Great Victory achieved in the 44-day Patriotic War for the liberation of Karabakh, led by Supreme Commander-in-Chief of the Armed Forces of the Republic of Azerbaijan, Mr. Ilham Aliyev. This victory is celebrated as the most glorious chapter in Azerbaijan's history. Simultaneously, commemorative coins featuring "Shusha," "Lachin," "Kalbajar," "Zangilan," "Jabrayil," "Fuzuli," and others were released to showcase the historical and cultural significance of our cities and regions that have been liberated from enemy occupation to the global audience.

Recommended literature:

1. Qənbərov, Fuad. Məzənnə siyasəti: yeni çağırışlar və imkanlar : monoqrafiya / F. Qənbərov ; elmi red. Ə. Ələkbərov ; AMEA İqtisadiyyat İnstitutu. - Bakı : Avropa nəşriyyatı, 2021. - 296 s.
2. Azərbaycanın xarici iqtisadi əlaqələri : nailiyyətlər və perspektivlər / A. K. Ələsgərov [et al.] ; red. A. K. Ələsgərov [et al.] ; AMEA İqtisadiyyat İnstitutu. - Bakı : Avropa nəşriyyatı, 2015. - 332 s.
3. Şəkərəliyev, Arif Şəkərəli oğlu. Dövlətin iqtisadi siyasəti : reallıqlar və perspekttivlər: monoqrafiya / A. Ş. Şəkərəliyev ; elmi red. M. X. Meybullayev. - Bakı : İqtisad Universiteti nəşriyyatı, 2009. - 416 s.
4. Hüseynov, Tofiq Həsən oğlu. Azərbaycanın milli iqtisadi inkişaf modeli: nəzəriyyə və praktika : monoqrafiya / T. H. Hüseynov ; elmi red. A. K. Ələsgərov. - Bakı : Elm, 2015. - 466 s.
5. Qurbanov, Çingiz Nəbi oğlu. Azərbaycanda pul tədavülü və bank işinin təkamülü : b.e.ə. IX əsr - 2014-cü il / Ç. N. Qurbanov. - Bakı : Avropa nəşriyyatı, 2018. - 547 s.