Demand for notes of Central Bank of Azerbaijan exceeds supply

22 January 2021 19:27 (UTC+04:00)

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The Baku Stock Exchange held an auction on the placement of short-term notes of the Central Bank of Azerbaijan (CBA) on January 22, 2021, Trend reports citing the BSE.

The number of notes was 100 million manat ($58 million), circulation period - 252 days.

During the auction, seven investors submitted nine orders in the price range from 95.33 manat or $56.07 (seven percent) to 96.13 manat or $56.54 (5.75 percent).

According to the CBA's decision, the cut-off price of the bonds reached 95.81 manat that’s $56.35 (6.24 percent) and the weighted average price - 95.82 manat that’s $56.36 (6.23 percent). The total amount of orders at nominal prices amounted to 222.1 million manat ($130.6 million) while the volume of placed notes is 100 million manat ($58 million), which demonstrates the excess of demand over supply by more than two times.

The maturity date is October 1, 2021.

The auctions for the placement of the CBA’s notes are mainly used to regulate liquidity starting from 2021. The auctions on notes are preferable to deposit auctions. The reason is the further development of the interbank monetary market.

Short-term notes are a monetary policy tool for regulating the money supply in circulation. Only banks can buy notes.

(1 USD = 1.7 AZN on Jan. 22)

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