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Exchange rate policy in Azerbaijan reduces external risks

Business Materials 6 February 2012 20:10 (UTC +04:00)

Azerbaijan, Baku, Feb.6 /Trend A.Akhundov/

The correct exchange rate policy pursued by the Central Bank of Azerbaijan (CBA), significantly reduces the risk of second-wave of the global economic crisis impact on the economy, particularly in the banking sector, chairman of the Azerbaijani-Turkish bank AzerTurkBank Mehmet Sami Acarozmen told Trend.

"The global crisis, of course, affects Azerbaijan, but less if compared to other countries. One of the main reasons is the cost of the national currency, which is formed not without reason, and not groundless," Acarozmen said.

Acarozmen noted that a stable position of the country's economy is a positive factor.

"The situation in the market, consumer prices in the country, bank interest rates gradually stabilizes, normalize, and come into line with international rates compared to pre-crisis years of 2005-2008, when the economy was developing rapidly. In those days banks sold money at high interest rates, and people bought them. For example, our bank offered loans at 18-22 percent, but can provide loans only under 12-13 percent per annum nowadays; it means that bank interest is normalized and the same can be said about the prices for real estate, which were very high," Acarozmen said.

Acarozmen said, revival of the banking sector is expected in 2012.

"2010 and 2011 were difficult for the banking sector of Azerbaijan. Twelve banks were operating at a loss in 2011. Total profit of the banks stood at 252 million manat at the end of 2009, but it dropped to 120 million manat during the year. I expect the figure to be the same at the end of this year as last year" Acarozmen said.

There are 44 banks operating in Azerbaijan.

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