Azernews.Az

By Ayya Lmahamad

The Central Bank of Azerbaijan (CBA) and the European Bank for Reconstruction and Development (EBRD) have signed a $200 million swap agreement to ensure the financing of Azerbaijan’s real sector amid COVID-19 pandemic, the Central Bank’s press service reported.

The agreement is part of the CBA’s cooperation with international financial institutions in a bid to support businesses and the population during the time of novel coronavirus pandemic.

Under the new agreement, EBRD will provide credit support to local companies in local currency. Of this amount, $50 million will be transferred to local companies, especially the relatively small ones that have faced temporary difficulties this year.

The agreement between the Central Bank and the EBRD will not only support enterprises affected by the pandemic, but will also encourage the increased use of derivatives in Azerbaijan and their use as an alternative financing instrument.

The CBA and EBRD also cooperate to develop Azerbaijan’s capital market by issuing shares in manat in local market and bringing the legal framework of the derivatives market in line with international standards.

To date, the EBRD has invested €3.3 billion ($3.6bn) in Azerbaijan’s economy within 172 projects. The EBRD also provides business consulting services to small and medium enterprises, has provided technical support to improve financial performance and development of more than 1000 companies.

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