The Central Bank’s exceptional function of issue of the national currency of the country is specified in the Constitution of the Republic of Azerbaijan.

The People’s Bank halted lending and became an institution serving budget operations along with financial bodies.

[citation needed] The TSSR was included to the Union of Soviet Socialist Republics (USSR) on 30 December 1922.

Article 14 titled "The Banking system and money circulation" of the Constitutional Law of the Republic of Azerbaijan "On Grounds for Economic Independence 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, and determined the status and authorities of the National Bank.

[citation needed] The effective date of the Decree (12 February) is celebrated as the day of establishment of the Bank.

[citation needed] The national currency of the Republic of Azerbaijan – the Azerbaijani manat was issued into circulation on 15 August 1992 and was announced the only legal tender from 1 January 1994 onward.

According to Para II, Article 19 of the first Constitution of the independent Republic of Azerbaijan, adopted by the 12 November 1995 referendum, the National Bank enjoys the exceptional right of issue of monetary units into and withdrawal from circulation.

AZM remained in parallel circulation with AZN in 2006 and only on 1 January 2007 the country started to use the new Manat.

[citation needed] According to the amendments to the Law of the Republic of Azerbaijan “On the Central Bank of the Republic of Azerbaijan”[citation needed] adopted on 4 March 2016, the authority to license, regulate and supervise banks were assigned to a newly established regulating body.

Since then, the Central Bank has focused on the monetary and exchange rate policy, safeguarding macroeconomic and financial stability, regulation and development of centralized interbank and other licensed payment systems and organization of cash circulation.

According to the Order of the President of the Republic of Azerbaijan “On improving management of the regulation and supervision of financial services market”[citation needed] issued on November 28, 2019, the Financial Market Supervisory Authority was liquidated.