Taleh Kazimov: ABB closed short foreign currency position

The sale by the Central Bank of Azerbaijan (CBA) of foreign currency in the amount of $236 million contributed to the complete closure of the short open foreign currency position of the International Bank of Azerbaijan (ABB), CBA Chairman Taleh Kazimov said at an online press conference, Report informs.

He noted that the Central Bank sold the currency for this amount from its reserves in order for the ABB to close its foreign currency position: “Currently, such a situation in Azerbaijan’s financial sector is not observed in any bank. The open foreign currency position of the ABB has already been closed, all the rules have been met. Although we forecast a recovery in our foreign currency position within two months, it happened in a month. This move was made in terms of supporting the financial sector.”

The problem of ABB’s short open foreign currency position arose as a result of the bank’s restructuring process.

Foreign currency position is the ratio between the amount in foreign currency that the bank owes to its counterparties and the amount of claims in foreign currency that the bank has. The situation when these amounts are not equal to each other (imbalance) is called an open foreign currency position. If the bank has more debts in foreign currency than claims, it is a short foreign currency position, in other cases - a long foreign currency position.