WB offers Azerbaijan to OK lending in national currency
By Nigar Abbasova
The government of Azerbaijan may allow international financial organizations to launch issuance of manat loans.
Angela Prigozhina, WB expert on financial and private sector work in the South Caucasus told Trend that the Financial Market Supervisory Body (FMSB) and foreign financial entities are currently in talks on the issue.
She clarified that for the time being European banks and international financial corporations have a right to issue credits in national currency only by means of hedging their foreign exchange risks in the currency exchange fund (TCX).
“For instance, Georgia has already created a relevant regulatory basis, due to which international financial organizations have a right to issue loans in national currency. Similar system may be used in Azerbaijan. However, the market liquidity policy of the country raises certain issues, which should be solved. We recommend Azerbaijan to use the instrument, which is important for the development of securities market, as well as for diversification of risks of companies,” she said.
Prigozhina went on to add that the WB may also issue manat loans and use them for crediting of the Azerbaijani economy. However, the bank does not use the TCX services and traditionally places its loans in large scale projects.
“WB implements crediting in national currencies in China, Japan, and Brasil,” she said.
Azerbaijan became a WB member in 1992. As of September 2016, the Bank allocated loans to the country worth $3.99 billion, while the funds were used to finance more than 70 projects.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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