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Current interest rate in Azerbaijan to improve position of local capital market - Unicapital

Finance Materials 12 April 2021 19:22 (UTC +04:00)
Current interest rate in Azerbaijan to improve position of local capital market - Unicapital

BAKU, Azerbaijan, Apr. 12

By Zeyni Jafarov - Trend:

The noticeable excess of demand over supply was observed at the stock exchange as a result of the recent auction on placement of medium-term bonds of the Azerbaijani Ministry of Finance, Seymur Ibadov, head of the research and investment consulting department of Unicapital OJSC, told Trend on April 12.

During the recent auction 23 investors submitted 39 orders, where the range of profitability ranged from 7.27 percent to 13 percent. As a result, 45 million manat ($26 million) was placed with an average yield of 7.4 percent.

Ibadov stressed that two auctions for the placement of short-term and medium-term bonds of the Azerbaijani Ministry of Finance are planned to be held for the first time on April 13 and the envisaged volume on orders will be 20 million manat ($11 million) and 10 million manat ($5 million), respectively.

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

Ibadov said that during the recent meeting of the Central Bank of Azerbaijan, a decision was made to maintain the interest rate at 6.25 percent.

"This level will further reduce the inflation rate, which will improve the position of the local capital market," Ibadov added.

While tracking changes in inflation and other global, regional and economic factors, the Central Bank of Azerbaijan may make a new decision on the level of the inflationary range in late April 2021.

The board of the Central Bank of Azerbaijan on March 19 decided to keep the discount rate at 6.25 percent. At the same time, the lower limit of the corridor was set at 5.75 percent while the upper one - 6.75 percent.

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