Azerbaijan, Baku, Nov. 15 / Trend A.Akhundov /
The Central Bank of Azerbaijan (CBA) will attempt to influence the reduction of bank interest rates on loans exclusively through market-based methods.
This was said to reporters on Thursday by the General Director of the CBA Rashad Orujov.
"We support the reduction of interest rates. As a consumer I would also like to receive loans at a low interest. However, for objective reasons this is impossible. The average interest rate on loans in the entire system is 15 per cent per annum, but there are different products with different risks, so their rates vary between 25-36 per cent, which is quite normal, "Orujov said.
According to him, the average interest rate is for the last year decreased by one percentage point.
"This is a good shift, and considering that the average deposit rate is 10.1 per cent, a margin of 4.9 per cent is left, the costs of which are paid by banks for credit management," the director general of the Central Bank said.
Banks should cover the risks from these funds maintaining simple income margins.
"How should we reduce lending rates in this case? We need to reduce the cost of liabilities. If you look at the profit margins of our banks, this is not the highest margin and I think that it is at a moderate level," Orujov said
In addition, Orujov said the trend of rate reduction is positive.
"There should not be any non-market interventions. The rates should be reduced by market methods," Orujov said.