FIRST YEAR OF ELECTRONIC TENDER SYSTEM
It is one year that the Exchange Electronic Tender System (BEST) has been in operation at the Baku Intrerbank Currency Exchange (BICE).On July 9, it was for the first time in Azerbaijan that tenders were held in a universal electronic system, that is a platform for complex management of currency risks and short term liquidity of banks. The BEST gives a chance to bankers in offices or in tender hall of BICE, to hold transactions with three foreign currencies (USD, EUR and RUR) with dates of currencing of T+0, T+1 and T+2, informational-analytical department of BICE reports. Participants of electronic tenders at BICE are the National Bank of Azerbaijan and 21 banks of second level. During a year’s operation, the volume of electronic tender system deals at BICE exceeds the level of 306,755 billion manats or 62,533 million US dollars. If the share of electronic deals in the total volume of currency section of the exchange came to more than 10 percent by end-2002, according to the information by July 1, it has upped to 41 percent. As a result of a considerable growth of liquidity of the BEST system, the volume of tenders at BICE increased 1,5, times or by 51 percent and reached 112 million US dollars or 549,5 billion manats between January and June of 2003. Increase of the number of participant-banks from 1 up to 22 speaks in favor of growth of liquidity of electronic system. After electronic tender system was introduced, BICE has reduced margins in currency section from 0,075 down to 0,04 percent. The volume of commissioner gatherings from currency purchaser-banks is limited by a sum equal to 500 US dollars. Those banks which sell more than 300 thousand US dollars during one tender are exempt from commissioner gatherings. For the further increase of BEST liquidity, BICE has introduced the related changes into the regulations of tenders in electronic system. The duration of a trade session on instruments TOM and SPT in the BEST system has been prolonged for another 30 minutes, till 17:30 instead of 17:00. So, tenders in the BEST system are held by the exchange from 10:00 to 17:30, local time. In November, 202, BICE introduced the practice of determination of tender limits basing on balance systems submitted by member-banks. It gives an opportunity to the banks to make currency deals in BEST within a few seconds without preliminary transfer of funds to BICE accounts. A considerable success has been achieved this year in development of inter-bank loan market within the electronic tender system. So, the volume of deals on credit resources made by means of an organized inter-bank loan market, being a part of BEST, came this year to 10,5 billion manats. Some 14 banks joint this market, having a right of deposit free borrowing. Growth of liquidity of the organized inter-bank loan market is mainly connected with applies of the National Bank put forward daily since February 2003 for placing loans for the term of 1,7 and 30 days under the deposit of funds of commercial banks at the expense of funds deposited in the reserve fund.
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