Baku, Azerbaijan, Dec.23
By Azad Hasanli - Trend:
In 2015, interest rates on loans will be reduced in Azerbaijan.
Azerbaijani President Ilham Aliyev gave the relevant instruction in the decree on the application of the law "On State Budget of Azerbaijan for 2015" signed Dec.22.
The Central Bank of Azerbaijan (CBA) has been instructed to take measures to reduce interest rates on loans of commercial banks, to reduce the difference between the lending and discount rate of the regulator, according to the decree.
At present, the average interest rate on loans in Azerbaijan is 14.3 percent. About three-quarters of the loan portfolio of banks accounts for business loans, rates on which in average amount to 10.8 percent. Interest rates on consumer loans (a quarter of the portfolio) account for 18 percent.
The discount rate of the Central Bank of Azerbaijan is currently equal to 3.5 percent.
In addition, in accordance with the decree, the CBA will have to report on the implemented work to the president of Azerbaijan twice in a year.
The chairman of the Central Bank of Azerbaijan Elman Rustamov previously said that the interest rates are one of the central issues of macroeconomics worldwide.
"In general, this issue is closely connected with the problems of economic activity, economic growth, employment, inflation," he said.
He went on to add that CBA consistently works to reduce interest rates in the country.
Interest rate on secured consumer loans for car purchase accounts for 14-18 percent, on mortgage loans allocated by the state line - 4.8 percent, on mortgage loans granted at the expense of own funds of banks - 10.9 percent.
Interest rates on consumer loans amount to 35 percent, however, they are completely unsecured loans.
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