BAKU, Azerbaijan, May 24. Azerbaijan plans to reduce the share of debt denominated in foreign currency in accordance with its strategy, the Milli Majlis (Azerbaijani Parliament) Committee for Economic Policy, Industries and Business Enterprising said at meeting, Trend reports.
According to the country's Chamber of Accounts, this became possible after the successful placement of government securities (Eurobonds) in foreign currency in the amount of $1.25 billion on international financial markets in March 2014.
The validity period of these Eurobonds is 10 years, and the interest rate is 4.75 percent.
"In accordance with the debt strategy, part of the government bonds with a nominal value of $350 million was repaid ahead of schedule. In addition, in 2024, Azerbaijan must return the remaining part in the amount of $900 million to foreign investors. Some 592 million manat ($348.2 million) were converted and used to repay the major amount of the external public debt," the chamber notes.
According to the chamber, some risks in this area are still relevant. The share of debt with a variable interest rate in the total amount of external debt increased from 38.4 percent to 41.6 percent.
Moreover, bonds due within five years accounted for the largest share of the total external debt and the average maturity of government bonds remained low, with a predominance of medium- and short-term bonds (80.7 percent by volume, respectively).
"The volume of operations on the secondary market and repo [repurchase agreement] operations (reverse repo) on government bonds also decreased. Effective debt management and a variety of sources of financing are needed to ensure the sustainability of the state budget of Azerbaijan," the chamber added.