Market-making banks postponed publication of BakIBOR and BakIBID indices Farhad Amirbekov, BICEX

Business Materials 17 April 2006 18:51 (UTC +04:00)

Meeting of banks with market-maker status is to be held by the end of April. Trend reports with reference to Farhad Amirbekov, head of Baku Interbank Currency Exchange (BICEX), that the meeting agenda includes loans on interbank crediting, as well as the stock exchanges right to publish banks loan rates - BakIBOR and BakIBID indices, which today are the main indices of Azerbaijans money market.

Since 1997 BICEX has been calculating BakIBOR (Baku Interbank Offer Rate) and BakIBID (Baku Interbank Bid Rate) twice a month; these indices were just some approximate indices of current AZM-USD rate. However, starting from the moment of market-making introduction (December 2005) at Organized Interbank Credit Market acting through Stock Exchange Electronic System of Trades (SEST), these indices are calculated on a daily basis.

Banks asked for a postponement till April 15, in order to BICEX to publish the indices,

but then prolonged this break till the end of April, up to the discussion of this issue at the meeting.

In the event of daily calculation of the index, it may become the basis for tax computation, which is already stated in the written notice received by BICEX executives from Association of Banks of Azerbaijan and Ministry of Taxes. В"In many countries the stock exchange is a non-profit organization that promotes the development of trading systems. One of its main functions is publishing market indices that are reference points ensuring transparency of the marketВ", - stockbrokers opine. At the moment stockbrokers suggest mortgage programs, operations in the money market, in particular note profitability is the main matter of concern as capital market (operations at money market, mortgage programs, operations with securities) may be considered a solid formation, and its rates shall be calculated on a daily basis. Too, these indices may become prototypes.