The Central Bank of the Republic of Azerbaijan announced a new financial instrument, to be offered under a three-year programme starting on 1 August 2025, aimed at expanding real-sector access to finance on more favourable terms by enabling banks and non-bank credit organisations to hedge certain foreign funding. Under the programme, funds raised by banks and non-bank credit organisations from non-resident financial institutions will be converted into manat and then hedged using the Central Bank’s instrument. The hedged funding will be directed to loan and leasing finance for micro, small and medium-sized enterprises, family-farm households and the self-employed. The programme also covers eligible funding raised in the three months before 1 August 2025 that has already been used to finance the target groups. In that case, institutions can cancel existing hedging instruments and switch to the Central Bank’s facility, with 50% of any resulting savings allocated to easing credit terms for customers.
Central Bank of the Republic of Azerbaijan 2025-07-22
Central Bank of the Republic of Azerbaijan introduces a three-year hedging instrument to support foreign-funded lending to the real sector
The Central Bank of the Republic of Azerbaijan announced a three-year programme starting 1 August 2025 to expand real-sector access to finance by enabling banks and non-bank credit organisations to hedge foreign funding. Funds from non-resident financial institutions will be converted into manat and hedged using the Central Bank’s instrument, targeting loans and leasing for micro, small, and medium-sized enterprises, family-farm households, and the self-employed. Eligible funding raised before the start date can switch to the Central Bank’s facility, with 50% of savings directed to easing credit terms for customers.