Azerbaijan, Baku, Oct. 21 / Trend I.Khalilova /
The coordinated efforts of the Azerbaijani government and Central Bank of Azerbaijan (CBA) allowed us to quickly minimize the potential impact of the global crisis on the national economy, CBA Spokesman Emin Huseynov said at the third International Conference on "Financial Institutions - the basis of structural modernization of the CIS economy" in Baku on Thursday.
The policy chosen to maintain a stable exchange rate enabled to preserve low inflation, curbing the growth of dollarization and prevention of the crisis on the balance sheets of banks and businesses," Huseynov said.
The policy on preserving the stability of the national currency prevented a sharp rise in imports of goods intended for the development of local production, protected the public deposits from depreciation and curbed the growth of debt loads on loans in foreign currency.
"The measures which the CBA timely proposed and effectively implemented to strengthen the financial stability of the banking system also enabled to support production and investment activities of the large enterprises," Huseynov said.
The CBA's key measures to support the growth and activity of economic entities, as well as the asset quality of banks and their liquidity, included the repeated lowering of the refinancing rate, lowering the reservation norms on attracted domestic sources, issuance of special loans to banks and fivefold increase of the amount of state-insured deposits.
Azerbaijani banks continued mortgage lending to support the construction sector in the period of the global crisis not by focusing on the tightening of credit, but by strengthening the analysis of potential borrowers' solvency, he said.
In addition, the country's banks continued to actively work to expand the range of financial products, and improve their quality and availability. Constantly expanding branch network of the banks contributes to the development of the economy and the private sector in all regions of Azerbaijan. Currently, the banks' branch network consists of about 650 branches and 120 offices. The figure rose by more than 20 percent over the past two years.
"The country's banking system managed to preserve stability and achieve a specific development with the expansion of the number and structure of non-bank institutions and implementation of many activities for the establishment of the postal banking system," Huseynov added.
He said for almost two years the country observed a steady significant increase in the volume of public deposits - by 47 percent, which reached 2.8 billion manat ( in 2009 and nine months of 2010).
"The total capital's amount increased by 30 percent and this enabled to preserve active growth of the banking operations. During this period, the banking assets grew by 20 percent to 12.4 billion manat, loans to economy and the public by 25 percent to 8.8 billion manat. This suggests that our banking system has withstood the test of the global crisis, but it is also necessary to improve the activities on the basis of the lessons of the crisis in post-crisis period, "Huseynov said.
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