Central Bank of Azerbaijan facts for kids

Quick facts for kids
Central Bank of the Republic of Azerbaijan
Azərbaycan Respublikasının Mərkəzi Bankı

National emblem
Headquarters	Baku
Coordinates	40°22′43″N 49°50′43″E / 40.378661°N 49.845386°E / 40.378661; 49.845386
Established	12 February 1992; 33 years ago (1992-02-12)
Ownership	100% state ownership
Governor	Taleh Kazimov
Central bank of	Azerbaijan
Currency	Azerbaijani manat AZN (ISO 4217)
Reserves	6436.3 million USD (as of 30.06.2020)
Website	www.cbar.az

The Central Bank of Azerbaijan (CBA, Azerbaijani: Azərbaycan Mərkəzi Bankı) is the main bank for the country of Azerbaijan Republic. It's often called a central bank because it helps manage the country's money and banking system. The bank's main office is in the capital city, Baku.

The National Bank of the Republic of Azerbaijan was first created by a special order from the President of the Republic of Azerbaijan. This happened on February 11, 1992. Later, on March 18, 2009, its name was changed to "The Central Bank of the Republic of Azerbaijan." This change was made after a public vote (a referendum) to update the country's Constitution.

The rules for the Central Bank are set by a law called "On the Central Bank of the Republic of Azerbaijan," passed on December 10, 2004. This law explains what the bank does, how it's managed, and its powers. The Central Bank is the only one that can print the country's money, which is stated in the Constitution. It also follows other laws and international agreements that Azerbaijan has signed.

History of Banking in Azerbaijan

The story of central banking in Azerbaijan has a long past. It includes different time periods:

• The time of the Azerbaijan Democratic Republic (1918–1920).
• The Soviet era (1920-1991).
• The modern banking history since Azerbaijan became independent again in 1991.

Early Days: Azerbaijan Democratic Republic (1918-1920)

In the early 1900s, Azerbaijan became an independent country on May 28, 1918. At first, people used different types of money, including special bonds and Russian money. A branch of the old State Bank of Russia was still working in Baku.

The government of the Azerbaijan People's Republic decided to create its own main bank, the Azerbaijan State Bank, on March 7, 1919. On September 16 of the same year, the Parliament approved the bank's rules. The bank officially opened on September 30, 1919. This bank was like the "bank of banks." It watched over other banks and was in charge of printing money.

Soviet Era: Changes and Control (1920-1991)

After the Azerbaijan Democratic Republic ended on April 28, 1920, the Azerbaijan State Bank was renamed the Azerbaijan People’s Bank. This happened on May 31, 1920. Soon after, on June 9, 1920, all banks were taken over by the state. This meant the government had full control over all banking activities.

The main job of the Azerbaijan People’s Bank was to print banknotes. It also helped fund the country's economy and managed the government's budget. However, it stopped giving out loans and focused more on managing government money.

By the end of 1921, a new economic plan meant the central bank was needed again. So, the Azerbaijan State Bank was re-established on October 16, 1921.

Later, Azerbaijan became part of the Soviet Union. On January 10, 1923, the Azerbaijan State Bank stopped printing money. On July 3, 1923, it was renamed the Azerbaijan State Agricultural Bank. It then focused on helping farming and managing money flow.

In 1923, a branch of the USSR State Bank was opened in Baku. From 1936 until the end of 1991, the Azerbaijani Office of the USSR State Bank was in charge.

Modern Independence: A New Beginning (Since 1991)

When Azerbaijan regained its independence, a law on May 25, 1991, set up the legal rules for an independent banking system. It also allowed Azerbaijan to have its own national currency. This law said that the National Bank would be the main agency for printing money. It would also guide the country's policies on loans, money circulation, and foreign exchange.

The National Bank was officially created by a presidential order on February 11, 1992. February 12 is celebrated as the bank's establishment day. The first law for the National Bank was passed on August 7, 1992. Its official rules were approved on December 1, 1992.

Azerbaijan's national currency, the Azerbaijani manat, was first used on August 15, 1992. By January 1, 1994, it became the only official money in the country. The Constitution, approved on November 12, 1995, confirmed that only the National Bank could issue and withdraw money.

The Central Bank now follows updated banking laws. The most recent version was adopted on December 10, 2004.

On January 1, 2006, a new Manat (AZN) was introduced. One new Manat was worth 5,000 old Manats. Both old and new Manats were used together in 2006. From January 1, 2007, only the new Manat was used.

On March 18, 2009, the bank's name was officially changed to "the Central Bank of the Republic of Azerbaijan." This change reflected its role as the country's main bank.

In 2016, some of the Central Bank's jobs, like giving licenses to banks and watching over them, were given to a new organization. This allowed the Central Bank to focus more on managing money, keeping prices stable, and making sure payment systems work well. However, in November 2019, the new organization was closed. Its responsibilities, including licensing and supervising financial services, were given back to the Central Bank.

Goals and Functions

The main goal of the Central Bank is to keep prices stable. This means making sure that the cost of goods and services doesn't change too much or too quickly. This helps the economy stay healthy.

The Central Bank also works to make sure that payment systems (like how money moves between banks) run smoothly. It also supports the stability of the entire banking system. The Central Bank's main purpose is not to make a profit.

To achieve its goals, the Central Bank does many important things:

• It manages the country's money supply and foreign exchange (money from other countries).
• It organizes how cash is used in the country.
• It sets the official exchange rate for the Manat.
• It controls and regulates foreign money.
• It gives licenses to banks and insurance companies and watches over their activities.
• It regulates the stock market.
• It manages the country's gold and foreign money reserves.
• It helps create the country's balance of payments, which tracks money coming in and out.
• It develops statistics on the country's foreign debt and international investments.
• It organizes and regulates payment systems.

Structure and Management

The Central Bank has a special structure to help it do its job. It includes:

• The Management Board, which is like the main decision-making group.
• The central administrative body, which handles daily operations.
• Regional offices located in different parts of the country.

The Management Board is in charge of running the Central Bank. The members of this Board are chosen by the National Parliament (Milli Mejlis) after being suggested by the President of Azerbaijan. The Governor and Deputy Governors of the Central Bank are chosen by the President from among the Board members.

The Chairman of the Management Board leads the bank's daily operations and chairs the Board meetings. This person also represents the Central Bank and assigns duties to senior managers.

The Central Bank has six regional offices across the country to carry out its functions. These include offices in the Nakhchivan Autonomous Republic, Ganja, Bilasuvar, Guba, Yevlakh, and Sumgayit.

Governors

See also

• Economy of Azerbaijan
• Azerbaijan manat
• Banking in Azerbaijan
• List of banks in Azerbaijan
• List of central banks