Finance

Finance

Central Bank of Azerbaijan will support the financial market by overdraft loans

28 October 2009 16:38 (UTC +04:00)

Baku. Vahab Rzayev - APA-ECONOMICS. The Central Bank of Azerbaijan has set up a guarantee system in the organized inter-bank credit market to support the development of domestic financial market.

The purpose of the system is to strengthen mutual trust between the banks and increase liquidity in the interbank credit market, said the central bank.

In this regard, a secured money market and a mechanism involving the Central Bank was founded at the joint initiatives of the Baku Interbank Currency Exchange and market making banks.

The system is based on the overdraft line of CBA that ensures the timely fulfillment of obligations, and collective responsibility of participating banks.

It is decided to put a limit on the credit amount and maximum duration of lending operations on the first phase of the segment.

As the volume and intensity of operations increase, the credit limit and duration of operations will be extended.

The launch of the new segment will help flexible regulation of interbank liquidity and efficiently carry out monetary policy.