Baku, Azerbaijan, March 16
By Azad Hasanli - Trend:
The Central Bank of Azerbaijan (CBA) has increased the reserve requirements for the deposits in foreign currency from 0.5 percent to one percent.
This is while the reserve requirements for deposits in national currency, as well as for securities have remained unchanged (0.5 percent).
The changes will be effective from May 1, 2016.
Under the Azerbaijani law, the country's banks should keep part of the attracted deposits in the Central Bank. Previously, banks were keeping 0.5 percent of the total volume of deposits in the Central Bank regardless the currency in which they were deposited in the banking sector.
After the changes, the banks will reserve one percent of their deposits in foreign currency in the CBA.
This decision will stimulate banks in attracting deposits in manats. Given that deposits are one of the main sources of lending, one can assume that the banks' opportunities for issuing loans in the national currency will also increase.
The volume of deposits in foreign currency stood at 18.66 billon manats as of Feb.1, 2016, according to the Central Bank. Accordingly, 93.3 million manats has been reserved in the Central Bank. However, this amount will double from May.
The official exchange rate for March 16 is 1.6186 AZN/USD.