Decrease in interest rate in Azerbaijan for 2021 seems improbable - Unicapital

Finance Materials 22 February 2021 22:39 (UTC +04:00)
Decrease in interest rate in Azerbaijan for 2021 seems improbable - Unicapital

BAKU, Azerbaijan, Feb. 22

By Zeyni Jafarov - Trend:

An active demand was observed at an auction held on February 16, 2021 on the placement of medium-term bonds of the Azerbaijani Ministry of Finance at the stock exchange, which reached 140.8 million manat ($82.8 million), taking into account placement of only 45 million manat ($26.5 million), Seymur Ibadov, head of the research and investment consulting department of Unicapital OJSC, told Trend on Feb. 22.

Some 15 investors submitted 23 orders, in which the range of their profitability ranged from 7-15 percent. As a result, 67.5 million manat ($39.7 million) was placed with an average yield of 7.85 percent.

Ibadov also said that the Ministry of Finance plans to place other bonds next week, the volume of orders for which will reach 20 million manat ($11.8 million).

If the demand for state bonds during trading exceeds the supply and the issuer is pleased with the price, the volume of bonds offered by the issuer can be increased up to 50 percent.

Ibadov stressed that the Central Bank of Azerbaijan, as the capital market regulator, predicts inflationary expectations at the level of four percent by the end of 2021 amid expectations of an increase in aggregate demand, supported by fiscal policy.

"The unambiguously indicated inflation rate is the target range of the Central Bank of Azerbaijan and proceeding from this, the likelihood of a sharp decrease in the interest rate during the coming year seems to be minimal," head of the department said.


Follow the author on Twitter:@jafarov_zeyni