Azerbaijan, Baku, Jan. 29/ Trend , I. Khalilova/ Azerbaijan Deposit Insurance Fund (ADIF) has increased funds placed abroad $2.8 million. Funds have been placed in the U.S. Federal Reserve System as well, ADIF executive director Azad Javadov said.
"First funds were placed an soon as fund's member banks carried out calendar payments in Q3 of 2008," Javadov said.
Under ADIF investment policy, ADIF funds can only be placed in foreign securities with top ranking and financial institutes with A rating.
Currently, it is very dangerous to invest in foreign securities even those with high revenues. Therefore the ADIFB will not risk. It will place funds in Central Banks of leading countries and Azerbaijan's state securities.
ADIF prefers to manage funds independently. Great part of funds has been placed in long-term bonds of the Finance Ministry issued in manat. The ADIF has to manage funds in foreign currency abroad to diversify management. Rate of revenues from short-term state bonds makes up 5-6 percent per year while the U.S. Fed rate is 0.25 percent each year due to crisis.
Currently, great part of the ADIF funds is managed in national currency. Last year banks carried out calendar payments at 50 percent in manat, 40 percent in dollar and 20 percent in euro. This proportion is changed in favor national currency. However, €5-million-loan to be issued by KfW will shift portfolio's proportion.
According to legislation, the ADIF can save 5 percent or over 50 million manat of bank deposits. Portfolio of deposits of physical persons totals 1,711,000,000 manat. Deposit portfolio of 38 member banks hit 1,373,000,000 manat in 2008.
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