The national currency of Azerbaijan is the manat. Currently the Azerbaijani manat is worth about $1.25 US, or 0.91 euros. However, if you are travelling to the region, make sure to double-check the current value using a continuously updated currency check like XE.com. Also note that Azerbaijani restricts the rights of foreigners to export manats out of the country.
Note that the national currency of nearby Turkmenistan is also known as the manat. However, the two countries do have separate currency. When the Soviet Union still existed, its rubles were known as manats when they were distributed in this region. Currently $1 US is worth about 14,000 Turkemeni manats. Manat is simply a derivation of the Russian word “moneta,” or coins.
The first Azerbaijani manats were actually distributed about 90 years ago, during the brief existence of the Democratic Republic of Azerbaijan following the collapse of the Russian empire during the Russian Revolution. These manats were printed between 1919 and 1923, after which Azerbaijan was absorbed into a Soviet federal republic and currency distribution switched to the Transcaucasian ruble. During the lifetime of the Soviet Union, the region of course used the Soviet national currency, the ruble, although locally the ruble was also known informally as the manat.
In 1992, the Soviet Union collapsed and Azerbaijan re-emerged as an independent republic. When this happened, it immediately restored the manat to circulation and began printing it as a sharply undervalued currency, with $1 US equal to slightly less than 5000 manat. The value of the currency gradually crept upward as Azerbaijan, although still generally poor (the GDP per capita is just $5000) benefited from a wave of investment by oil companies.
As a result, in 2006, the government took the major step of re-valuing the manat. The new manat was pegged at a value of 5000 old manat, meaning it is roughly equal to $1 US. It is then subdivided into 100 qepik, similar to American cents.
It is this new manat which visitors to Azerbaijan will trade in today. Azerbaijani new manat come in coins of 1, 3, 5, 10, 20, and 50 qepik. Paper currency notes are then available in denominations of 1 manat, 5 manat, 10 manat, 20 manat, 50 manat, and 100 manat.
The currency is managed by the Central Bank of Azerbaijan, headquartered in Baku. There is currently a very high inflation rate, about 20% annually.