Baku, Azerbaijan, Nov.14
By Azad Hasanli - Trend:
The deterioration of the economic situation in Russa has affected Azerbaijan, Kazakhstan and Turkmenistan among the CIS countries the least.
Moody's Investors Service analyst Maria Malyukova made the remarks Nov.14 during the VII Baku International Banking Conference of the states participants of the CIS in Baku.
She said that in these countries, the cumulative impact on earnings from export, foreign direct investment and remittances from Russia amount to less than 5 percent of GDP.
"Tajikistan, Kyrgyzstan, Belarus, Armenia and Uzbekistan [cumulative impact of more than 10 percent of GDP] have the greatest vulnerability due to the deteriorating economic situation in Russia," she said. "Georgia has an average impact of 5 to 10 percent of GDP."
Malyukova said that currently, the operating environment of the CIS banks is influenced by negative factors such as geopolitical conflict in Ukraine, sanctions against Russia, the slowdown of economic growth in Russia and the fall in oil prices.
"Given that there are very close links between Russia and other CIS countries, the deterioration of the Russian economy has a direct impact on the other countries of the Commonwealth," she said.
She said that the gold reserves act like an air bag cushion in this situation. "Azerbaijan has the best indicator in terms of foreign exchange reserves in relation to the upcoming payments on external debt, Ukraine and Belarus have the worst indicator," said the Moody's analyst.
In addition, only Azerbaijan and Uzbekistan have a "stable" outlook for the banking sector. For other countries, the forecast of the banking system is "negative."
"We do not anticipate negative rating actions regarding Azerbaijan," she said. "Of the seven banks in Azerbaijan rated by us, three banks currently have a "positive" outlook."
She also said that a lot of attention is paid to the assessment of the operating environment, macroeconomic conditions that directly affect the financial stability, assets quality, profitability, liquidity, and others during creation of the forecast for the banking systems.