Azernews.Az

Azerbaijan’s national currency, manat, dominates the allocation of loans by local banks, and its share in such credit disbursals has nearly doubled over the past decade, an Azerbaijani expert has said.
Samir Aliyev with the Public Union for Assistance to Economic Initiatives said that whereas in 2001 manats accounted for 36% of the loaned funds, the figure has now reached as much as 60%. The expert explained the trend, in addition to high confidence in the Azerbaijani currency, by volatility in foreign currency rates in the past ten years, particularly that of the US dollar, and falls in hard currency rates.
Aliyev noted that the dollar rate has been on downward trend since 2000. In 2009, many refused to hold their savings in dollars. Since mid-2009, the euro faced a similar situation. Therefore, banks preferred to lend funds in manats, considering the instability of foreign currencies.
"The Azerbaijani money’s remaining stable amid ongoing devaluation in a number of countries stimulated banks to allot loans in manats," Aliyev concluded.
According to him, unlike loans, the foreign currency’s "pressure" is being seen on bank deposits held by private individuals. Thus, the deposits in manats have decreased from 55% in 2008 to the current level of 43%. In early 2009, when currency devaluation concerns arose, many began withdrawing their savings held in the national currency or converting them into other currencies.
"Unlike banks, the population does not fully rely on the manat yet," the expert said.*