Weekly review of developments in Azerbaijan's financial market
BAKU, Azerbaijan, Sept.20
By Fidan Babayeva - Trend:
This week, the State Statistical Committee of Azerbaijan published macroeconomic indicators for the first eight months of 2020, Trend reports citing the committee.
According to the committee, from January through August 2020, the nominal volume of gross domestic product (GDP) in Azerbaijan amounted to 45.9 billion manat ($27 billion), which is 3 percent less compared to the same period of last year.
GDP per capita for the reporting period amounted to 4,611.7 manat ($2,712.7).
Also, this week, Azerbaijan’s Ministry of Economy announced the number of loans issued through the electronic credit platform (ECP). More than 2,700 applications have been submitted through the platform (www.e-edf.gov.az), created by the Ministry of Economy to provide state-guaranteed loans to entrepreneurs affected by the coronavirus (COVID-19) pandemic in an easy and transparent manner to receive business loans totaling 765.3 million manat ($450.1 million). A decision has already been made to allocate loans totaling 52.6 million manat ($30.9 million) for 253 applicants.
In addition, this week it became known that Azerbaijan has become a new donor to the Asian Development Bank (ADB). ADB’s donors reached an agreement to allocate additional funds worth $4 billion to the budgets of the Asian Development Fund (ADF) and the Technical Assistance Special Fund (TASF). Of the total replenishment, over $2.3 billion, or 58 percent, will be funded by contributions from 30 donors, including two new donors, Azerbaijan and the Philippines.
Azerbaijan participated this week in the webinar of the countries of the Central Asian Regional Economic Cooperation (CAREC), which was attended by Azerbaijan’s Minister of Finance, member of the ADB Council of Heads Samir Sharifov and Deputy Minister of Economy of Azerbaijan Rovshan Najaf. During the meeting, the sides exchange their views on encouraging regional cooperation during the coronavirus pandemic, on increasing trade between member states, simplifying border and customs procedures and on supporting development in the post-pandemic period.
This week, the Board of the Central Bank of Azerbaijan (CBA) made a decision to reduce the interest rate. According to the bank, the interest rate was reduced from 6.75 percent to 6.5. The lower limit of the interest rate band was set at 6 percent and the upper limit of the percentage band was estimated at 7 percent. This decision was aimed at supporting aggregate demand, keeping inflation in order to maintain macroeconomic stability (4±2 percent) and thereby accelerating the economic recovery process.
Along with these events, this week the Compulsory Insurance Bureau began to issue compensation to creditors of Standard Insurance OJSC, which was declared bankrupt. In accordance with the legislation, the bureau began to fulfill obligations under compulsory insurance contracts concluded with the insurance company, and within one day paid out about 800,000 manat ($470,588) to creditors.
Moreover, the outgoing week was marked by multidirectional changes in oil prices, as well as the stability of the manat against the ruble.
(1 USD = 1.7 manat on Sept. 20)
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