The International Monetary Fund (IMF) and World Bank (WB) are negotiating a possible $4b emergency loan for oil exporting country, Azerbaijan, helping it to cope with mounting currency and budget pressures due to a steep drop in crude prices, Reuters reported. The loan could be the first of several bailouts for oil-exporting countries, as the global financial institutions become concerned over emerging market producers from central Asia to Latin America, wrote The Financial Times. The World Bank predicted crude prices would average only $37 a barrel in 2016 and warned of long-term consequences.
While upcoming discussions with the IMF and WB are at an early stage, Baku may still opt for tackling the economic issues without the external help. Baku was hit by the plummeting oil prices, as oil and gas amount to 95% of country’s export, making up to 75% of the state revenues. In December, Azerbaijan floated its currency, the manat, following a 35% drop in its value, and its foreign exchange reserves slimmed. As a result, the country has witnessed widespread protests and citizens were prompted to withdraw their savings, wrote Radio Free Europe/Radio Liberty.