Today, when the global economy is still experiencing difficulties due to the crisis, there are calls to world central banks for help. In addition to mitigating the monetary policy, one expects financial assistance from the central banks through the allocation of cheap
It is noted that the world financial markets have significantly recovered in the first quarter of 2012 due to the injections of the European Central Bank. One should recall that it has
allocated 529 billion euro at the rate of one percent per year to the biggest financial institutions this year.
The Azerbaijani Central Bank has been crediting since summer of 2009.
The Azerbaijani parliament adopted the amendments to the Law on "Central Bank" to increase the flexibility of the CBA and tools for rapid response in terms of the ongoing global financial crisis and to solve problems to overcome the post-crisis situation.
According to the amendments, one of the innovations was the fact that the CBA will be able to finance the projects of socio-economic importance to provide the real economy with financial assistance, to issue targeted loans to big enterprises on the basis of state guarantees.
By doubling the credit resources to finance the banks and large enterprises, the CBA has become more liberal while determining the term and foreign currency lending, including the economy.
The first recipient of the loan from the Central Bank was SOCAR. It received 750 million manat under the state guarantee on the rate of 2 percent per annum for seven years, two years of which are subsidized in September 2009. The loan was intended to restructure the foreign debt of this Azerbaijani strategic company. The repayment of loans allowed the release SOCAR's property from collateral.
The CBA allocated the second direct loan in the same year to the strategic enterprise - "Azeraluminium". About 202 million manat was allocated for 10 years at three percent per annum to the aluminum plant. The funds were directed for the enterprise to fulfill its
obligations to the banks and foreign partners, and in the second stage - on measures to develop the aluminum industry. The aluminum industry greatly needed huge financial assistance, but the banks were not able to provide the necessary resources, as well as the state budget, which
was formed. Additional funds for this purpose were not envisaged.
The Central Bank allocated a direct loan to "Azerenerji" to finance the project of building 760-megawatt thermal power plant Cenub in December 2010. The Central Bank has allocated 300 million manat for the construction of the power plant, by completely covering the needs for this project financing.
CBA has allocated the long-term loan to AZAL company under the state guarantee in excess of 300 million manat in January 2011. The loan is directed to renovate the aircraft fleet of the company, in particular, to make flights in the direction of Nakhchivan. The loan has been allocated on preferential terms - at a rate of 4 percent per annum for 12 years. It was the fourth direct loan in the history of the Central Bank allocated under state guarantee to finance the country's strategic enterprises.
Totally, CBA has allocated 1940.9 million manat (including interest payments on loans) to support state enterprises. As of July 1, 2011, about 9.5 percent was returned. The central bank sees no risk of returning these loans. These credit resources are allocated for the long term and, therefore, are paid in stages. SOCAR has already ensured the payment of the most part of the loan ahead of the schedule
The Central Bank has no plans to issue new targeted loans in 2012 to support major strategic state-owned enterprises. The Central Bank allocated a subordinated loan for five years at a rate of 150 million manat to the International Bank of Azerbaijan (IBA) in February 2012 to capitalize solvent banks experiencing temporary difficulties. The special subordinated debt obligation refers to the first level capital in accordance with "Rules of the calculation of bank capital and its adequacy". Using long-term state financial resources, IBA will reach its capitalization and liquidity.
Thus, the CBA follows the development of the situation in connection with the global financial and debt crisis. It takes precautions and uses timely steps. Using an instrument of providing strategically important enterprises and banks in the country with liquidity support is one of the areas of anti-crisis policy of the country's government. In the future, the central bank intends to reduce it to a minimum.
Leyla Abdullayeva /Trend