Azerbaijan's Central Bank, EBRD sign swap agreement
BAKU, Azerbaijan, May 19
The Central Bank of Azerbaijan (CBA) and the European Bank for Reconstruction and Development (EBRD) have concluded a swap agreement totaling $200 million in order to increase access to financial resources of the real sector during the coronavirus pandemic (COVID-19), Trend reports with reference to the CBA.
Thus, the EBRD will gain new opportunities to provide credit support to local companies in national currency, gaining reliable access to local currency. It is estimated that $50 million (85 million manat) out of 200 million will be channeled to local firms, including smaller viable enterprises, faced with temporary difficulties this year.
According to the EBRD's report, Azerbaijani companies can now benefit from loans denominated in the local currency manat (AZN) provided by the EBRD thanks to an agreement with the CBA.
The EBRD has secured reliable access to AZN liquidity, in the form of swap transactions worth a total of $200 million, and will continue local currency lending to companies, said the EBRD's report.
The agreement is part of the EBRD’s stepping up support for Azerbaijani companies as the country's economy faces the double challenge of the coronavirus outbreak and the global oil market shock, noted the report.
The EBRD's report also said that the EBRD has made available a Solidarity Package to help companies in its regions, with 38 emerging markets, deal with the economic impact of the pandemic. The EBRD stands ready to provide support worth 21 billion euro over the 2020-2021 period.
The package includes short-term liquidity, working capital and restructuring of exposure for existing clients, as well as trade finance and an emergency support program for key infrastructure providers. The Bank will also ramp up its local currency, capital markets and equity offers, the report added.
The EBRD is an important institutional investor in Azerbaijan. To date, the bank has invested 3.3 billion euro through over 170 projects in the country. It also provides business advice to local small and medium-sized enterprises (SMEs) and has helped more than 1,000 firms to improve their performance and growth.
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents.