Energy-rich Azerbaijan, whose economy has been hit hard by falling oil prices, withdrew support Monday for its embattled currency and the manat plunged by nearly a third against the dollar.

Energy-rich Azerbaijan, whose economy has been hit hard by falling oil prices, withdrew support Monday for its embattled currency and the manat plunged by nearly a third against the dollar.

The manat's plummet spurred jitters, with major retailers halting business in the ex-Soviet country and anxious consumers fearing for their future.

"The central bank took the decision to switch to a floating exchange rate for the national currency as of December 21," the regulator said in a statement.

It said the decision was taken because "falling oil prices and the continuing devaluation of partner countries' currencies has begun to negatively affect the Azerbaijani economy."

The manat was trading at 1.55 against the dollar on Monday, down 32.3 percent from Friday.

The country's central bank has spent more than half of its foreign currency reserves -- which it said had reached "critical levels" -- to support the manat, in free fall since the beginning of the year.

"I expect the manat to further devaluate," analyst Samir Aliyev told AFP. "The era of a stable manat has ended."

"The main problem is that the national currency's collapse will inevitably lead to higher inflation rates."