By Leman Mammadova
Azerbaijan closely cooperates with international financial structures to develop the country’s securities market.
Lately, lending in Azerbaijan’s national currency manat has become attractive for several international financial organizations.
The Black Sea Trade and Development Bank (BSTDB) issued the first tranche of Azerbaijani manat bonds on August 1, which is directed to the development of entrepreneurship in the country.
The Bank has recently issued bonds worth 10 million manats ($5.88 million). The total amount of manat bonds, which the BSTDB plans to issue during the year, equals 50 million manats ($29.42 million) and will be allocated in tranches.
BSTDB plans to issue the second tranche of a bond loan in the Azerbaijani manat in early 2020, the Bank's President Dmitry Pankin told local media.
The Bank aims to continue its support to the sustainable development of the local securities market and respond promptly to the needs of the Azerbaijani market, in particular, to the financing of small businesses in the local currency, Pankin noted.
He stressed that the market demand is a key point in BSTDB’s activities. “We have established cooperation with the regulatory authorities in Azerbaijan. We are gaining experience on cooperating with our Azerbaijani partners on these products,” Pankin said.
He expressed hope that other international development banks will follow BSTDB’s example.
In order to issue bonds in manats, the BSTDB will firstly select projects on which it will work and then look at the possibility of using the national currency to finance them.
BSTDB is the first international financial institution to issue bonds in the Azerbaijani manats. The practice of lending in national currencies emerged after the 2007-2008 crisis, when the monetary units of emerging markets fell sharply. Thus, it became too risky to take loans in dollars and to receive revenue in local currency.
The European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) are also interested in issuing and placing bonds in the Azerbaijani manats.
BSTDB supports economic development and regional cooperation, participates in granting loans to member countries for projects in the public and private sectors, opening credit lines, investing in and granting guarantees and trade financing. So far, the total number of the Bank's operations in Azerbaijan is 39 with the financing reaching about 366 million euros.
Earlier, Pankin noted that BSTDB may allocate about 80 million euros for projects in Azerbaijan in 2019. This will mainly be the financing of small and medium-sized enterprises (SMEs).
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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