BAKU, Azerbaijan, April 24. In the CIS+ region, the direct impact of tariffs will be low as exports to the US are limited, Trend reports via Fitch.
“Armenia and Georgia are oil importers, while banks in
oil-exporting CIS+ countries such as Azerbaijan and Kazakhstan
generally have low direct exposure to the oil and gas sector, and
strong liquidity buffers. In countries with high external
liabilities, particularly Uzbekistan, refinancing for state-owned
banks may become more costly, but risks are mitigated by state
support and the long-term nature of most external borrowings,
mainly from international financial institutions on concessional
terms,” reads the report released by Fitch.
The rating agency’s analysts note that the US dollar has weakened
since the major tariff increases, but if this trend reversed,
local-currency depreciation would be likely to weaken asset quality
in countries with high dollarisation.
“However, most banks have capacity to absorb moderate losses,
and the authorities could support domestic currencies if
needed.
In Africa, Nigeria and Angola are most exposed to lower oil prices,
meaning asset quality and foreign-exchange liquidity are likely to
weaken. Capital could also weaken if the local currencies
depreciate, a possibility exacerbated by likely reduced
availability of external aid, but most bank ratings are low and
unlikely to be affected. Refinancing risks are limited due to
banks’ low reliance on foreign-currency wholesale funding,” reads
the report.