High interest rates by Azerbaijani banks attributed to high interest rates on deposit: Central Bank deputy director
Azerbaijan, Baku, June 24 / Trend , N. Ismayilova/
Interest rates on loans issued by Azerbaijani commercial banks are high due to interest rates on deposits, Central Bank First Deputy Director Alim Guliyev said.
"Many of Azerbaijani banks is staging various deposit campaigns and offer products at different rates and interest rates on loans are also at a high level due to high interests rates on deposits," Guliyev said.
He said the concerns among the people that appeared in early 2009 have subsided and people trust banks again.
"Flow of external funds into the country completely stopped on the backdrop of the crisis and the banks had to pay liabilities via own resources," he said.
He said due to the fact that the financial resources of the bank are formed by both internal and external resources, reducing the interest rate by the Central Bank had no impact on interest rates on loans issued by commercial banks.
The average interest rate on loans issued by commercial banks in Azerbaijan is 20-24 percent. According to the Central Bank, the average rate on a credit equal to 17 percent, but its calculation also takes into account the rates on loans granted by the Mortgage Fund and the National Fund for Entrepreneurship Support.
Given the deflation, according to the 2009 monetary policy, on May 25, Central Bank of Azerbaijan cut interest rate to 2 percent in order to maintain macroeconomic balance, fiscal stability and economic activity in the country.
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