Weekly review of main events of Azerbaijani financial market

Finance Materials 12 April 2021 09:43 (UTC +04:00)
Weekly review of main events of Azerbaijani financial market

BAKU, Azerbaijan, April 12

By Zeyni Jafarov - Trend:

The International Monetary Fund (IMF) has released its April World Economic Outlook report last week, Trend reports.

In accordance with the report, Azerbaijan's GDP growth is projected at 2.3 percent in 2021 while the economy will grow by 1.7 percent in 2022.

The IMF predicts inflation rate in Azerbaijan at 3.5 percent in 2021 and 3.2 percent in 2022. The unemployment rate will reach 5.8 percent in 2021 and it will decline to 5.7 percent in 2022.

Moody's international rating agency confirmed Ba2 level of Azerbaijan's long-term issuer and prioritized unsecured commitments ratings.

In accordance with the data, this outlook reflects an assessment that governance and especially policy effectiveness are improving, albeit from a low base, which could improve the resilience of the government's credit profile.

The rating of the State Oil Company of Azerbaijan (SOCAR) on corporate, default and unsecured bonds has been confirmed at 'Ba2', base credit rating - at "b1", the Moody's international rating agency said.

Accordingly, the forecast for the SOCAR bonds was changed from 'stable' to 'positive'.

The agency's statement noted that the rating action reflects SOCAR's strong credit ties with the state and its exposure to the impact of Azerbaijan's operating and macroeconomic environment.

The Central Bank of Azerbaijan (CBA) has announced last week that the information about the facts of making payments through the MoneyGram transfer system, which illegally operated in the occupied territories of Azerbaijan till the 44-day second Armenia-Azerbaijan Nagorno-Karabakh War, has been recently spread on social networks.

The CBA said that the MoneyGram money transfer system during the certain periods illegally operated in the occupied territories of Azerbaijan. When this was revealed, adequate measures were taken to terminate its activity on the Azerbaijani territory in accordance with national legislation and international principles.

The CBA also commented on the information, spread by the media citing the Accounts Chamber’s report on the results of its activities for 2020, about the illegal transfer of foreign currency abroad through the banks. According to the source, the chamber’s report covers the results of 2019, not 2020.

The source said that during the reporting year, commercial banks operating in Azerbaijan officially transferred nearly 1.1 billion manat ($650 million) abroad. These operations were also aimed at replenishing correspondent accounts of banks with foreign banks in accordance with the usual practice.

Meanwhile, Minister of Economy of Azerbaijan Mikayil Jabbarov met with Director of the Azerbaijani office of the Asian Development Bank (ADB) Candice McDeigan.

During the meeting, Jabbarov stressed that Azerbaijan attaches great importance to cooperation with ADB and highly appreciates its financial and technical support. In turn, McDeigan expressed satisfaction with the bank's activities in Azerbaijan and shared her views on the issue of expanding bilateral ties.

The parties also discussed the development of cooperation in various fields, technical assistance from ADB in the field of a partnership between the state and the private sector, opportunities to support reforms at state-owned enterprises.

As part of the measures to expand the coverage of the instant payments system in Azerbaijan, three more banks have been integrated into it last week, the CBA said.

"Bank Respublika, Pasha Bank, and Bank VTB provided their clients with the opportunity to use the functionality of the instant payment system," the CBA said.

Thus, individuals, legal entities, and state agencies were able to conduct settlements 24/7 through simplified identifiers (FIN, mobile phone number, e-mail) on bank accounts.

The Azerbaijan Insurers Association (AIA) and the Agricultural Insurance Fund signed a memorandum on mutual cooperation on the development of the insurance sector last week.

During the meeting, AIA Executive Director Elmar Mirsalayev highly appreciated the importance of this cooperation, noting that this step will give impetus to the joint implementation of priorities related to the development of the insurance sector.

In turn, chairman of the board of the Agricultural Insurance Fund Fuad Sadigov expressed confidence that the agreement reached will stimulate the development of a new agricultural insurance mechanism in Azerbaijan, the formation of agricultural insurance skills among the existing insured and potential contingent.

The Supervisory Board of the Azerbaijan Insurers Association (AIA) has approved a three-year strategy for the development and stimulation of the local insurance market. The document covers 2021-2023 and includes eight strategic goals.

"The concept contains areas such as improving infrastructure in the insurance sector, supporting the application of national professional standards, building an insurance culture by increasing literacy in this area, expanding international cooperation projects and increasing corporate social responsibility together with local participants in the insurance market," the AIA said.

A rise in gold prices and a rise in the price of the manat compared to the Russian ruble have been observed last week.