Azerbaijani population’s deposits remain stable in banks: head of central bank

Business Materials 6 April 2009 19:06 (UTC +04:00)

Azerbaijan, Baku, April 6 / Trend I. Khalilova /

Reduction of loan activity world wide, including Azerbaijan, is one of impacts of the world financial crisis, the Azerbaijani Central Bank's board chairman Elman Rustamov said during discussions at the public television. 

"We observe no growth in loaning from Azerbaijani banks within last months that attracts attention amid annual growth in loan investments in the amount of 60-70 percent, Rustamov said. And this fact has objective reason."

Major reason of loan volumes reduction is limitation of foreign borrowings, Central Bank's head said.

Up to now Azerbaijani banks actively draw funds from the world financial markets in terms of high world economic state. Volume of foreign lends reached $2.5 billion. However, monetary market is practically inactive today.

"Presently, it deals with not only difficulty to draw foreign funds but banks must pay off $1.5 billion from funds drawn from abroad, Rustamov said. It must be provided owing to repayment of loans earlier granted by banks."

Azerbaijani banks must carefully pay off foreign borrowings, otherwise it can negatively affect image of the country. Banks accumulated enough liquidity to pay off debts on this regard. But banks have no opportunity to coordinate on domestic market with loan activity, Rustamov said.

Moreover, population's deposits remain stabile in banks and lag for several percent is observed, he said.

"It is also impossible to draw additional funds from domestic market as it somehow connected with reduction of economic activity in the country but from other side with psychological factors, the Central Bank's head said. It is necessary to draw funds from domestic market for medium-term and long-term goals of economy's stability on this regard.

Problem of stability is major task within anti crisis program, he said. The country's economy, the Central Bank and entire financial system must balance its activity to preserve economic stability in terms of financial insufficiency. Azerbaijan enters five of world countries on the rate of stability.  

"We have certain opportunities and we must find them," Rustamov said.

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