BAKU, Azerbaijan, July 28. The share of problem loans has decreased by 3.8 times in Azerbaijan, over the past five years, Assistant to the President of the Republic of Azerbaijan - Head of the Department of Economic Policy and Industrial Issues of the Presidential Administration of the Republic of Azerbaijan Natig Amirov said in an analytical article, Trend reports.
Presently, capital investments of the banking sector are able to absorb the potential risks that concern world markets, article said.
"Credit risks decreased over the past five years, and a sharp reduction in the volume of problem loans has been achieved. Therefore, share of problem loans decreased by 3.8 times during past five years,” Amirov said.
“The process of de-dollarization of deposit and loan portfolios continues, which began in the financial and banking sector, in 2016. Therefore, the share of foreign currency in loan portfolios decreased by half in first five months of 2022 compared to the same period 2016 (47.1 percent) and amounted to 24.1 percent.
Similar trend was observed in deposit ecosystem, and the share of foreign currency in deposits decreased from 75 percent to 50 percent during the specified period,” Amirov noted.
Strategic foreign exchange reserves have been formed as a result of ongoing reforms in Azerbaijan, to minimize external impacts, he added.
According to Amirov, the dynamics of the growth of foreign exchange reserves, observed since 2016, continued in 2021.
The growth occurred both at the expense of the State Oil Fund of Azerbaijan (SOFAZ) and at the expense of the foreign exchange reserves of the Central Bank of Azerbaijan (CBA), he added.
“Assets of the banking sector increased by 31.6 percent in 2021 compared to 2016 and reached 41.3 billion manat ($24.2 billion),” Amirov said.