Azerbaijan, Baku, 8 April / corr. Trend I. Khalilova/ The rise in foreign debts of the Banking system of Azerbaijan has increased its sensitivity to the risks in financial markets worldwide. Well aware of it, the National Bank of Azerbaijan (NBA) keeps these processes in control, said Rufat Aslanli, the Deputy Head of NBA Board of Directors who is taking part in the fifth Caspian International Conference and Exhibition Banks and Finance that begins in Baku on 8 April.
In spite of high growth rates of banking, its foreign debts are not so high and are on safe level, said Aslanli. This figure makes up 6.6% of GDP and one fifth of bank deposits at present. The analysis conducted by NBA, showed that the re-financing of foreign debts in long-term or short-term perspective do not pose any danger for banking in the country. It is attributed to the fact that more than half of the debt capital (up to $600) will be paid off in the course of year.
"The assets of domestic banks are liquid, therefore there is no need to re-finance foreign debts," said Aslanli. "Significant thing is that the banks have planned the liquidity on dates in a right way and the debt capital will be put out into financing of short-term assets," he said.
More than one third of debt capital accounts for international financial institutes (EBRD, IFC, KfW and others) or it has been granted as a credit by the foreign shareholders of Azerbaijani banks. According to him, the risks of re-financing of foreign capital does not poses any danger for Azerbaijan and it is attributed to the fact that the debt capital in the government and private sector of Azerbaijan exceeds 32% of currency reserves of the country, which is at a low level as compared to the region countries.
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