The central bank in Azerbaijan has abandoned its currency peg and floated the manat, following a similar move by Kazakhstan earlier this year.
The manat fell by nearly 48 percent against the U.S. dollar (from 1.04 to 1.55 manat to the dollar) following the announcement by the central bank on December 21.
Azerbaijan's central bank said the move was made to "preserve hard currency reserves...and ensure the national economy's competitiveness on the international arena."
In February, Azerbaijan's central bank changed the way it values the manat, moving away from the dollar and instead to a dollar-euro basket.
Falling global energy prices have hit Azerbaijan hard. Energy exports account for about three-quarters of the country's state revenues.
The latest move by Azerbaijan is similar to action taken by Kazakhstan in August when that Central Asian state depegged its currency, the tenge, from the dollar.
Since then, it has lost about 85 percent of its value. Last month, the central bank introduced a new 20,000-tenge note.