Maintaining low-interest rate in Azerbaijan to have positive effect on capital market - Unicapital

Finance Materials 8 February 2021 20:08 (UTC +04:00)

BAKU, Azerbaijan, Feb. 8

By Zeyni Jafarov - Trend:

There was an active demand at the stock exchange following the recent auction on placement of short-term bonds of the Azerbaijani Ministry of Finance, Seymur Ibadov, head of the research and investment consulting department of Unicapital OJSC, told Trend on Feb. 8.

“Some 16 investors submitted 25 orders at the recent auction, in which the range of order profitability ranged from 5.88 percent to 12 percent,” the head of the department said. “As a result, 30 million manat ($17.6 million) was placed with an average yield of 6.2 percent.”

“An auction on the placement of the bonds of the Azerbaijani Ministry of Finance will be held on February 9 and the envisaged volume on orders will reach 35 million manat ($20.6 million),” Ibadov said. “If the demand for the state bonds during the auction exceeds the supply and the issuer is pleased with the price, the volume of bonds offered by the issuer can be increased to 50 percent.”

Ibadov stressed that as a result of the continuation of the soft monetary policy of the Central Bank of Azerbaijan (CBA), the interest rate will remain low for some time and its maintenance will further reduce the inflation rate, which will directly have a positive effect on the local capital market.

"Of course, the four percent inflation rate is the rate that the CBA is aiming at in 2021 and, proceeding from this, the likelihood of a sharp decline in the interest rate over the coming year seems minimal," the head of the department added.

Earlier, the chairman of the CBA stressed the fluctuation of the inflation rate in Azerbaijan during 2021 at the level of four percent.

“This forecast is primarily based on the recovery in consumption demand and fiscal-stimulated measures in Azerbaijan,” the chairman added.


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