Central Bank and EBRD provide joint financial support to businesses affected by coronavirus pandemic

20-05-2020

19 May 2020, Baku: The Central Bank of Azerbaijan continues package of measures to support businesses and the population amid pandemic. One of the related important innovations is the introduction of new financial instruments to further boost access of the economy to financial services as part of the cooperation of the Central Bank with international financial institutions. To that end, the Central Bank and the European Bank for Reconstruction and Development (EBRD) signed total $200M worth of swap agreement to increase real sector access to financial resources amid coronavirus outbreak. Consequently, the EBRD will get new opportunities to maintain national currency denominated lending support to local companies with a reliable access to the national currency. $50M (AZN85M equivalent) of this amount is planned to be allocated to local companies, in particular to relatively small companies facing temporary difficulties in the current year.

The agreement between the Central Bank and the EBRD will both support pandemic affected businesses and promote expansion of and promotion of use of derivatives as an alternate financial tool. This is an achievement of the strategy pursued by the Central Bank on an international horizon, close cooperation with international financial institutions and the application of the international framework agreement on derivative financial instruments in the money and capital markets of our country.

At the same time, to develop the capital market in Azerbaijan the Central Bank and the EBRD continue cooperation on issue of manat denominated bonds in the domestic market and alignment of the legal framework of the derivatives market to international standards.

It should be noted that, the EBRD has been effectively cooperating with Azerbaijan for a long time. The Bank has invested €3.3B on 170 projects to the Azerbaijani economy. The Institution also provides business consultations to SMEs; it has provided technical assistance to over 1000 companies to improve their financial results and development.