Azernews.Az

By Akbar Mammadov

The situation in the currency market of Azerbaijan has gradually stabilized and the pressure on the national currency observed in March, decreased in April, Chairman of the Azerbaijan's Central Bank (CBAR) Elman Rustamov said at a press conference on May 13.

In May, the average demand at foreign exchange auctions amounted to $56 million compared to $66 million in 2019, the chairman said

"The exchange rate of the Azerbaijani manat is stable, and the pressure on cheap oil prices, which was recorded in March, has now been completely eliminated. In addition, important steps are being taken to ensure monetary stability", Rustamov added.

Rustamov said that the average inflation was 3 percent in January-April, which is within the target set by the Central Bank.

Inflation is expected to remain within this range by the end of the year, Rustamov noted.

"We forecast inflation within the goals and objectives by the end of the year. We are trying to take a balanced position on macroeconomic stability, inflation and employment support," the chairman said.

Loan portfolio

Furthermore, the chairman also noted that the loan portfolio of Azerbaijani banks increased by 1.9 percent in January-April this year and the volume of requests for restructuring loans has reached nearly 550 million manat ($323.5 million).

The main source of growth was business loans.

During this period, mortgage loans increased by 5.2 percent, business loans by 4.1 percent, and consumer lending decreased by 4.1 percent.

Rustamov said that as of early May, 48,000 requests for restructuring loans in the amount of 549 million manat ($322.9 million) were submitted, of which only 15 appeals weren’t positively responded.

As the chairman noted, in total, about 91 percent of all appeals fell on business loans, 4 percent - on consumer loans, and 5 – on mortgage loans. Meanwhile, over 37 percent of the requests for restructuring loans in the amount of 200 million manat ($117.6 million) have already been considered.

Thus, since early 2020, banks have allocated new loans to the real sector in the amount of 4.1 billion manat.

“Overall, the banking sector has sufficient liquidity. Today, the liquid assets of banks exceed 8 billion manat, which is 26 percent of the assets of the banking sector. Banks also timely fulfill all their obligations," Rustamov said.

The CBAR chairman added that the capital adequacy of the sector today is approximately 23 percent, which is 2.3 times higher than regulatory requirements.

According to the State Oil Fund, in January-April 2020, the fund sold foreign currency worth $3 billion 303 million at foreign exchange auctions organized by the Central Bank (an increase of 67.2% compared to the same period in 2019 ), including in March - $1 billion 928.3 million, in April - $531.1 million. SOFAZ announced that this year it plans to sell $6.8 billion in foreign currency auctions.

In the meantime, Rustamov said that the process of returning funds to depositors of Atabank OJSC and Amrahbank OJSC, whose licenses have been liquidated since April 28, will begin on June 1.

The volume of requests for restructuring loans has reached nearly 550 million manat ($323.5 million). According to Rustamov, as of early May, 48,000 requests for restructuring loans in the amount of 549 million manat ($322.9 million) were submitted in Azerbaijan, of which only 15 appeals weren’t positively responded.

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Akbar Mammadov is AzerNews’ staff journalist, follow him on Twitter: @AkbarMammadov97

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