BAKU, Azerbaijan, April 12. The Black Sea Trade and Development Bank (BSTDB) has announced the successful completion of its first-ever transaction with The Currency Exchange Fund (TCX), Trend reports via the BSTDB.
This debut transaction marks a milestone in BSTDB's commitment to delivering comprehensive solutions that effectively navigate the complexities of volatile and frontier financial markets of its member countries.
The collaboration involves a strategic cross currency swap, converting Azerbaijani manat disbursement and repayments into US Dollar (USD) flows on a loan provided by BSTDB to a leading bank in Azerbaijan.
Through this first transaction with TCX, BSTDB ensures it continues to receive USD repayments, while the client benefits from the financial stability of fixed debt service costs in their local currency, the manat. The arrangement safeguards the Azerbaijani bank and its clients against the potential depreciation of the manat.
"We are delighted to join the distinguished club of institutions leveraging the expertise of TCX to expand the range of frontier currency offerings to clients. The partnership with TCX reflects BSTDB's strong commitment to support sustainable economic growth and secure finance solutions for its development clients. Our lasting partnership will help take foreign exchange risk off the list of concerns for our clients in these times of uncertainty and help them unlock new growth opportunities," said Dr. Serhat Köksal, BSTDB President.
BSTDB became the first multilateral development bank to issue a local currency bond in the country. The two-year bond for the amount of 10 million manat was placed on the Baku Stock Exchange on 1 August 2019. The BSTDB bond issuance in manat supports the program of the government of Azerbaijan for de-dollarization of the financial sector.
As of January 1, 2023, the Black Sea Trade and Development Bank's (BSTDB) portfolio of projects in Azerbaijan stood at 12.649 million euros. This marks a decrease of over three times compared to the figure recorded on January 1, 2022, which amounted to 49.438 million euros, according to the bank's reports.
Azerbaijan holds a five percent share in the bank's share capital.
Follow the author on X: @Lyaman_Zeyn