Demand at deposit auction of Azerbaijan's Central Bank exceeds supply

By Trend

The Baku Stock Exchange held an auction on the placement of short-term notes of the Central Bank of Azerbaijan (CBA), Trend reports referring to the Baku Stock Exchange.

The Baku Stock Exchange raised 170 million manat ($100 million) from the Azerbaijani banks. The supply exceeded the demand by almost four times. Fourteen investors made 22 applications worth over 655.9 million manat ($385.8 million).

The cut-off price for competitive bids was set at over 99.5 manat ($58.5) (6 percent), the weighted average price was over 99.5 manat ($58.5, 6 percent). The volume of notes placed at the auction amounted to 170 million manat ($100 million).

The deadline for payment is Nov. 28, 2020.

The short-term notes are an instrument of monetary and credit policy for regulating the money stock in circulation. Only banks can acquire the notes.

The CBA started to hold deposit auctions in mid-June 2016. Deposit auction is an auction during which the deposits of commercial banks are placed in CBA. The main aim of such auction is sterilization of money supply.

(1 USD = 1.7 AZN on Oct. 30)