The Baku Stock Exchange (BSE) will hold a new auction for short-term notes of the Central Bank of Azerbaijan (CBA) on July 28, Trend reports referring to a source in the BSE.
During the auction, the CBA put up short-term notes worth 100 million manat ($58.8 million) with a circulation period of 28 days.
According to the regulations, the total number of bids submitted by each bank during the auction should not exceed two, provided that one of them is competitive and the other is non-competitive.
The nominal amount of the submitted applications must not exceed the volume of notes put up for auction. At the same time, it is allowed to accept non-competitive bids for an amount not exceeding 20 percent of the total issue of notes.
The maturity date is August 25, 2021.
Since 2021, auctions for the placement of the CBA notes are mainly used to regulate liquidity in Azerbaijan. The main reason why auctions on notes are preferable to deposit auctions is the further development of the interbank money market.
Short-term notes are a monetary policy tool for regulating the money supply in circulation. Only banks can buy the notes.
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