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Azerbaijan Deposit Insurance Fund to Choose Agents for Insurance Reserve Management

Business Materials 10 April 2008 16:53 (UTC +04:00)

Azerbaijan, Baku, 10 April / Trend corr. I.Khalilova / The Azerbaijan Deposit Insurance Fund (ADIF) is preparing to allocate its funds in the high rating securities of foreign banks and financial institutes with not less than AAA rating, Azad Javadov, Executive director of the fund stated. For this purposes, there are trying to select the agents who can manage the funds efficiently. The corresponding procedures are being held through the assistance of German experts.

For more efficient management of the funds, currently, the capital is invested in the state short-term bonds of Finance Ministry. The average income comprises 10%. Today, AZN 3.3mln has been placed in the short-term bonds.

"Key aim of the Fund is not to make benefit, but to insure its capital and placement of its funds in the high liquidity securities which provide zero risk,' Javadov said.

Additional returns to ADIF may be directed to foreign securities.

"It will depend on the rating of countries, where we are planning to place the funds. It may be a bank, big company or financial institute with not less than AAA rating," Javadov noted.

In accordance with the legislation, fund may collect 5% from all banking investments or AZN 50mln. The portfolio of investments of natural entities in Fund bank-members totals AZN 1,327,349mln in 2007. The limit of accumulations may be increased in accordance with the growth of banking investments in the future. Annual investment raise comprise 40% or 60%.

The current official rate at the National Bank of Azerbaijan is 0.83 AZN/USD.

The correspondent can be contacted at: [email protected]

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