Azerbaijani banks need to restructure problem loans
Baku, Azerbaijan, Dec. 21
By Anvar Mammadov - Trend:
The banking system of Azerbaijan should develop a common policy to deal with all credit and deposit problems of the population, MP of Milli Majlis (Parliament) of Azerbaijan Rufat Guliyev told Trend Dec.21.
He made the remarks in connection with the recent decision made by the Central Bank of Azerbaijan.
Starting from December 21, 2015 the Central Bank of Azerbaijan switched to a floating exchange rate of the national currency, and in the result, the exchange rate of the US dollar and the euro against the Azerbaijani manat rose by 47.6 percent and 47.9 percent, reaching 1.5500 manats and 1.6850 manats, respectively.
"First of all, it is necessary to resolve the issue with the already accumulated problem loans, which reached 1.3 billion manats," he said. "Banks should give an opportunity to population to return these loans, as this will benefit the banks themselves. It is necessary to increase the terms of payment in two or three times and reduce the interest rate so that the population would be able to return the loans. There is simply no other way."
Guliyev went on to add that similar processes take place in Azerbaijan's neighboring countries, including Russia, Kazakhstan, Ukraine and Belarus.
At the same time, one shouldn't forget that with the increase in oil prices, a reverse process could occur, i.e. manat will strengthen, as it already happened in 2005, he said.
"In addition, in the coming years, we launch major gas projects that will let us make up for our foreign exchange earnings," said the MP. "But one shouldn't wait for two or three years. We need to develop domestic production in order to increase and diversify our exports."