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Likelihood of interest rate decrease in Azerbaijan for 2021 seems minimal - Unicapital

Finance Materials 2 March 2021 17:39 (UTC +04:00)
Likelihood of interest rate decrease in Azerbaijan for 2021 seems minimal - Unicapital

BAKU, Azerbaijan, March 2

By Zeyni Jafarov - Trend:

There were multiple demands at the stock exchange as part of the auction held on February 23, 2021, on the placement of medium-term bonds of the Azerbaijani Ministry of Finance, which reached 75.9 million manat ($44.6 million) while placing only 20 million manat ($11.8 million), Seymur Ibadov, head of the research and investment consulting department of Unicapital OJSC, told Trend on March 2.

“Some 15 investors submitted 22 orders, in which the range of their profitability ranged from 8.25 percent to 10 percent,” the head of the department said. “As a result, 30 million manat ($17.6 million) was placed with an average yield of 8.47 percent.”

Ibadov also said that the Ministry of Finance plans to place bonds again next week, the volume of orders for which will amount to 30 million manat ($17.6 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,” the head of the department added.

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

"Of course, the inflation rate at the level of four percent is the target range of the Central Bank of Azerbaijan and as a result, the likelihood of a big decrease in the interest rate during the coming year seems minimal," head of the department added.

During the recent meeting, the head of the Central Bank of Azerbaijan announced the forecasts on inflation in the country during 2021 at the level of four percent.

This forecast is based on a recovery in consumption demand and fiscal stimulus measures in Azerbaijan.

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