Weekly review of Azerbaijan's financial market

Finance Materials 27 February 2023 09:16 (UTC +04:00)
Kamran Gasimov
Kamran Gasimov
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BAKU, Azerbaijan, February 27. This week, Azerbaijan's Central Bank (CBA) has approved a roadmap for sustainable financing for 2023-2026, Trend reports.

According to the CBA, the purpose of the roadmap is to ensure the resilience of financial institutions to risks arising from climate change and other factors (environmental, social and governance), as well as to realize the opportunities associated with the transition to a sustainable economy.

Furthermore, it was noted this week that Azerbaijan plans to complete the transition to result-based budgeting in the pilot sectors of education, agriculture and environmental protection in 2023.

In addition, new rules are being established in Azerbaijan for calculating interest when the loan payment is delayed. According to the amendments to the law, if the code and the contract do not provide for a separate rule, the amount that the creditor can demand due to the debtor's delay in paying the amount of money is limited. In this case, no more than 5 percent per year of the overdue amount is charged for the overdue time.

This week, the Azerbaijan Bank Association (ABA) and the Asian Development Bank (ADB) conducted consultations on risk management.

Moreover, the ABA and UAE Banks Federation signed a memorandum of cooperation. It is planned to develop correspondent relations between the banks of Azerbaijan and the UAE as part of the memorandum.

Furthermore, the Eurasian Fund for Stabilization and Development (EFSD) has shared a volume of sovereign financing in Azerbaijan.

According to EFSD, international financial organizations and development agencies have carried out 227 sovereign financing operations with a total cost of $6.2 billion in Azerbaijan from 2008 through 2022

A larger number of the financing operations accounted for technical assistance (180), followed by investment loans (44), stabilization loans (2), and grants (1).

The largest share of financing in monetary terms was granted in the form of investment loans ($5.5 billion) and stabilization loans ($0.6 billion).

The largest amount of funding was received as part of 33 operations implemented by the Asian Development Bank in the amount of $2.7 billion. The World Bank which has carried out 55 operations worth $2 billion ranks second. International Monetary Fund has implemented 70 technical assistance operations, and USAID is the leader among development agencies - 53 technical assistance projects.