The IMF and the world Bank will arrive in Baku to discuss assistance programs

MOSCOW, 28 Jan. Representatives of the IMF and world Bank will arrive in Azerbaijan on an official visit to discuss a possible package of emergency loans worth 4 billion dollars, associated with the collapse of the national currency and falling oil prices, reports the Financial Times.

It is reported that this loan may become the first in the series of programmes of financial assistance, caused by the fall in oil prices.

According to the publication, the representative of the IMF delegation will stay in Baku from 28 January to 4 February at the request of the authorities of the country. During the visit to discuss the “technical assistance” and “assessment of potential financial needs.” According to a source publication, we are talking about credits worth about $ 4 billion. According to the representative of the world Bank, the IMF and the world Bank discuss with the government of Azerbaijan for the immediate and long-term measures “due to the pressure on the local currency and low oil prices”.

According to the newspaper, negotiations with Baku are at an early stage, and the government of Azerbaijan can do without support from the IMF.

According to the publication, representatives of the government of Azerbaijan has not commented on this information. Last week the Minister of Finance Samir Sharifov said that one of the ways to cover the budget deficit in the country will issue bonds in the domestic market.

It is reported that representatives of other financial institutions, including the European Bank for reconstruction and development and the Asian development Bank, will also arrive in Baku in the next few days.

According to the publication, the world Bank and IMF also followed the development of the economic situation in other oil-producing countries, such as Brazil and Ecuador. The fall in energy prices could also lead to restoration of relations between the IMF and Venezuela.

The Central Bank of Azerbaijan from February 16, 2015 untie the manat against the dollar and moved on to targeting on the basis of the currency basket consisting of dollar and Euro. Since the 19th of December, the national currency depreciated by 25% (from 0,7844 to 1.05 manats per dollar). After the regulator received 21 December the decision to transition to a floating exchange rate, the stock market dropped by 33% (to 1.55 manats per dollar). In total, the Azerbaijani currency has fallen by 49%.

Because of the collapse of the manat has increased food prices, including Essentials, in some regions of the country have passed protest actions.