Azerbaijan, Baku, August 2 / Trend, A. Akhundov /
One of the factors contributing to the reduction in the cost of bank loans in Azerbaijan will be the distribution of non-cash payments, deputy chairman of the Central Bank of Azerbaijan (CBA) Khagani Abdullayev said at a press conference on Friday.
"One of the ways of influencing the interest rates is to stimulate the non-cash payments," he said. "The increase in their share will reduce the cost of financial resources in the country."
Moreover, the mitigation of the monetary policy by the Central Bank, as well as the reduction in the interest rate ceiling on insured deposits will have an effect. Azerbaijan Deposit Insurance Fund (ADIF) will not insure deposits of physical entities made in the country's banking system at a rate of more than 10 percent from August 1.
"The central bank continues examining the situation on the market," he added. "A trend of reducing interest rates has been observed since early 2013. It should be stressed that the rates on business loans in Azerbaijan do not differ much from regional and world ones. We are looking for the ways to reduce the interest rates on consumer loans. The cost of loans is formed in terms of the market economy."
Today, banks provide citizens with financing services on average at a rate from 28 percent to 32 percent. The effective rate reaches up to 40 percent per annum.
The average rate in the entire portfolio of consumer loans, including mortgages and car loans, made 18.25 percent in the country last year compared to 19.06 percent in 2011.