Cooperation with international organizations

World Bank

The Republic of Azerbaijan became the member of the five institutions in the WB Group on the following dates:

• The International Bank for Reconstruction and Development – 18 September 1992

• The Multilateral Investment Guarantee Agency – 23 September 1992

• The International Center for the Settlement of Investment Disputes – 18 October 1992

• The International Development Association – 31 March 1995

• The International Finance Corporation – 11 October 1995

The CBA Governor is the Administrator for Azerbaijan at the World Bank Group. This is the reason why the CBA mediates between the WB and the Azerbaijani Government. The WB assists Azerbaijan in reformatory programs on transition to the market economy, macroeconomic stability and management of oil revenues, resolving problems of refugees and IDPs, infrastructure rehabilitation (water, irrigation, roads), education and healthcare, measures to attract investments to the energy sector, public sector reforms, growth in agriculture and overall non-oil sector and new jobs creation.

Cooperation with the WB is still on the air within the framework of the Country Partnership Strategy (CPS) for 2016-2020. The CPS is a partnership plan based upon the needs and priorities determined by the Azerbaijani Government.

The CBA implemented two huge projects jointly with the WB – the Technical Assistance for Financial Sector, successfully completed in 2007 and the Financial Services Development Project completed in 2010.

The WB mission to Azerbaijan and the CBA management regularly meet and conduct consultations to analyze macroeconomic situation in the country and ensure adequate prudential regulation of the financial sector within the anti-crisis measures and effective monetary policy, as well as discuss joint projects.

www.worldbank.org

International Monetary Fund

Azerbaijan became the IMF member on 18 October 1992. The Minister of Finance of the Republic of Azerbaijan is the Head of the IMF Azerbaijan, and the CBA Governor – Substitute Head.

The IMF Azerbaijan cooperation is built upon the SAP. To note, initial estimations suggest that the IMF implemented programs for Azerbaijan were of high economic benefit. Thus, the structural adjustment program implemented through the IMFfinancial support contributed to internal and external rebalancing, and economic stability.

The IMF implemented programs in Azerbaijan:

• Poverty reduction and economic growth;
• Elevation of structural construction;
• System changes;
• Additional funding programs.

Under Article IV of Articles of Agreement between the IMF and Azerbaijan, the IMFdelivered technical assistance on institutional and monetary management capacity building in Azerbaijan in a number of fields, including management of public expenditures, the tax-customs policy and its management, central banking, banking supervision, monetary policy and statistics paralleled by up to now financial aids provided to facilitate the Azerbaijani Government to support economic programs. Macroeconomic analyses and policy, financial programming, fiscal policy and management, central bank accounting and banking supervision benefited from the IMF trainings.

The IMF experts pay regular visits to the CBA. These visits are fuelled by different discussions held with the IMF experts on CBA policies aimed at decrease in the inflation rate in a short run, and stabilization of inflationary predictions in a medium run, sensitivity evaluation of the banking sector, the exchange rate and interest rate policies, intervention and sterilization, rise in monetary base in manat, high liquidity in the banking system, and a diversification plan for foreign exchange reserves and other issues.

In order to strengthen the banking supervision framework, the IMF mission pays visits to analyze regulatory normative acts and liquidity norms, issue recommendations on improvement of liquidity requirements, supervisory experience, as well as AML/CTF, enhancement of the relevant banking supervision, improvement of monetary and exchange rate policies, transition to a floating exchange rate in a medium run, as well as increase in quantitative and qualitative criteria by monetary, macroeconomic, real and external sector statistic indicators and render consultations on improvement of statistic processes.

www.imf.org

United States Agency for International Development

The USAID has been closely cooperating with Azerbaijan, whose geopolitical location is of significant importance for the USA. The USAID has been financing development and humanitarian aid projects in Azerbaijan since 1992. The USAID financial assistance is primarily used to implement programs aimed at management and democracy, economic development and progress. The CBA is closely cooperating with the USAID to involve technical assistance. The latter has implemented a number of projects within the frames of this cooperation.

The USAID provided technical assistance on evaluation and improvement of the normative legal and methodological basis for banking supervision, improvement of onsite and offsite banking supervision, legal support for banking supervision, and application of the IFRS in the banking sector within the Technical Assistance on Banking Supervision Project for the CBA in 2002 – 2006; CBA employees were trained on various topics.

The 2007-2011 Financial Sector Stability Support Program provided technical assistance on development of prudential supervision guidelines, macro economical and financial management policies and guidelines, enhancement of the CBAresearch, forecasting and modeling capacity, planning of the strategy and system of HR and IT management, cash management, performance of the Financial Monitoring Service (FMS), improvement of risk management and corporate governance capacity, banking supervision, budgeting and financial planning.

The 2011 – 2013 Azerbaijan Competitiveness and Trade Project involved technical assistance on enhancement of institutional capacity of the FMS, business processes automation in cash operations, strengthening risk-based banking supervision, improvement of the institutional framework of strategic management, boost of financial management capacity, creation of operational risk management in theCBA, creation of the DSGE model, elaboration of the draft Law on Secured Transactions and development of the assets – liabilities and risks management system in the Azerbaijan Mortgage Fund.

www.usaid.gov

Swiss State Secretariat for Economic Affairs (SECO)

The cooperation between the SECO and the CBA dates back to 2002, which led to technical assistance in real sector monitoring, financial programming and management skills. To further expand cooperation the SECO and the CBA signed the first Technical Assistance and Training Program in 2003. Later the program was prolonged up to 2008 in 2006 and to 2011 in 2008. The CBA benefited from technical assistance on monetary policy, market operations, human resources, modeling and macroeconomic analysis, financial programming, application of corporate governance standards and other tracks within the program. Moreover, SECO experts provided workshops on quantitative methods, corporate governance standards in commercial banks, monetary sector forecasting and analysis and consultations on the real sector monitoring, financial programming, inflation models, econometric models and other topics for CBA employees.

The Bilateral Assistance and Capacity Building for Central Banks Program by the SECO (2012 – 2016) covered technical assistance on long-run forecasting of inflation in the CBA, use of economic activity indicators in monetary policy analysis, launch of an international settlements system on the international investment position, development of the methodology to unify survey results among households, estimate indices and analyze enquiry results, macroeconomy, forecasting methods, macroeconomic models and monetary policy modeling, development of guidelines on the 3P project, and project management capacity building.

www.attf.lu

Luxembourg Agency for Transfer of Financial Technologies (ATTF)

The CBA has been cooperating with the Luxembourg Agency for Transfer of Financial Technologies (ATTF) since 2006. Within this cooperation the ATTF experts organized workshops in Baku and Luxembourg on all actual banking areas for employees of commercial banks and financial institutions on various central banking directions

www.attf.lu

KfW – German Development Bank

KfW – Azerbaijan cooperation dates back to 1995. Within this project the KfW financed various investment projects and rendered consultations in Azerbaijan. Most of the KfW funds (about 85%) are long term loans with low interest rates, a small portion of which was issued as grants. KfW allocated loans for sustainable economic growth, energy, utilities infrastructure, and healthcare in Azerbaijan. The KfW capital participates in a number of Azerbaijani commercial banks. Moreover, KfW contributed to launch of the Deposits Insurance Fund. Currently, KfW is participating in various active and pending projects in the country.

The CBA cooperated with the KfW on technical assistance for legal examination and economic analyses of the draft Law on Home Savings to launch a Home Savings Bank, as a part of the study of alternative mortgage models in Azerbaijan, as well as study the relevant German experience, develop a pilot framework for financial institutions on consumer protection within the Protection of Depositors and Consumers Rights in the Financial Sector of Azerbaijan project, harmonize legal/regulatory issues to local conditions given best practices, conduct financial awareness campaign, assess the state of related institutions on consumer finance protection and legal and technical aspects of consumer finance protection.

www.kwf.de

Korea International Cooperation Agency (KOICA)

The CBA is cooperating with the KOICA within the Management of Information Technologies and Improvement of Security System project in the CBA project to provide the CBA IT system diagnosis, evaluate institutional, structural, operational and technical opportunities on IT management, set the key strategic targets and goals on the IT management system, improve IT management and IT security system, apply e-signature, adjust the CBA IT system to COBIT 4.1 standards, deliver consultations on preparation of a training plan on development and application of the IT management system, ensure participation of the CBAemployees in workshops on diverse topics in Korea.

www.koica.go.kr

Turkish International Cooperation and Development Agency (TIKA)

The Baku Coordination Office of the TIKA has been functioning since June, 1994 within the Technical Cooperation Protocol signed between the Turkish and Azerbaijani Governments. The office attaches a particular importance to launching cooperation with public authorities in Azerbaijan and local NGOs. In order to contribute to development of Azerbaijan and Turkish-Azerbaijani friendship up to now the TIKA has provided social projects on agriculture, SME development, tourism, statistics, healthcare and other tracks.

The TIKA is continuing cooperation with the CBA. The CBA employees pay visits to the Central Bank of the Republic of Turkey and the Turkish Banking Regulation and Supervision Agency and participate at various training courses in order to ensure exchange of experience within this framework. CBA employees visited workshops and exchange of experience organized by the TIKA.

www.tika.gov.tr

European integration

The legal and factual basis of ties between Azerbaijan and the European Union (EU) dates back to the Partnership and Cooperation Agreement signed in 1996 that opened new opportunities for these relations. The CBA is also represented in the Azerbaijan National Public Committee for European Integration created at the Decree of President of the Republic of Azerbaijan. At the same time, the Actions Plan entered into between Azerbaijan and the EU addressed a number of issues proposed by the CBA fuelled by significant progress.

The cooperation on the European Commission’s (EC) Twinning, TAIEX and SIGMAtools is on the focus. The CBA cooperates on the use of the tools in question. TheEC TAIEX provided technical assistance for the CBA on improvement of the legislative base on payment systems and services, launch of the crisis communication system, and improvement of the internal control.

Azərbaycan Respublikasının Mərkəzi Bankı 20 ildə