Azerbaijan's Central Bank will be participant of Organized Interbank Credit Market

BBVB reports that on Oct. 21 the Central Bank of Azerbaijan, BBVB and a range of market-makers (Azerdemiryolbank, ?GBank, investment & commercial bank Nikoil, Bank Standard, Pashabank, Unibank and Bank of Baku) signed an agreement that is a legal base for new segment of the money market.

The agreement contains mechanism of CBA participation in it that will allow diminishing essentially credit and estimated risks.

“Due to reduction of risks the money market should increase its liquidity. In its turn, the Azerbaijan’s financial market that bases itself first of all on Azeri manat will receive a new impulse in development,” it was reported.

The initiative of creation of new segment of the money market and mechanism of CBA’s involvement in it was suggested by the Exchange and the market makers.

“For a range of causes the global financial crisis made funding hard-to-reach for developing countries’ banks.

The issue of fast formation of internal reliable high-liquid money market has activated much. The CBA and BBVB develop purposefully OICM operating in the country since March 2002 as a BEST BBVB segment.

For the purpose of further money market development a range of commercial banks and BBVB reached in 2005 an agreement that allowed creation of the institute of market-making of the money market. By the present quantity of market maker banks reached 10.

The market maker banks place daily their orders in BEST to raise and place credit resources in both national and foreign currency, thereby forming money market indicators (BakiBID, BakiBOR). The CBA and the money market-makers undertake joint efforts aimed at developing the money market based on national currency,” it was reported.

Besides, the banks which signed the agreement with the CBA, the market-makers are also Bank Respublika, AtaBank and Kapital Bank. BakIBID - Baku Interbank Bid Rate (rate of raising), BakIBOR - Baku Interbank Offer Rate (rate of placement).

/Fineko/abc.az/