Baku, Azerbaijan, Mar.3
By Azad Hasanli - Trend:
Adjustment of the manat exchange rate in Azerbaijan had no effect on the financial stability of PASHA Bank, despite the fact that 30 percent of the bank's loan portfolio is concentrated in a foreign currency, a member of the Board of the bank, Chief Investment Director Taleh Kazimov told Trend March 3.
On February 16, the Central Bank of Azerbaijan (CBA) decided to waive the peg of the manat to the US dollar and move to the two-currency basket using the US dollar and the euro when determining the rate of the manat.
On February 21, the Central Bank of Azerbaijan established exchange rate of the manat to the US dollar at 1.05 manat per dollar (compared to 0.7844 manat earlier), which corresponds to the cheapening of the rate by 33.9 percent.
"PASHA Bank has no problems due to the weakening of the manat exchange rate, and financial stability of the bank remained at the same high level as before," he said. "Given the situation, we see great potential for the development of our business. Now the bank seeks to reaffirm that it is financial partner of the real sector of Azerbaijan and, first of all, its customers. Having analyzed the situation and the effect of the weakening of the manat on business customers, we are going to take all possible measures to help them minimize the effect of the devaluation."
Meanwhile, as Kazimov said, PASHA Bank is ready to become a partner for those who aren't yet the bank's customers.
"Perhaps most of those out of PASHA Bank's customer base may face certain financial difficulties and here the bank, naturally, is ready to support local entrepreneurs," he said.
"We, positioning ourselves as a strong sustainable partner for the country's corporate sector, stand ready to provide consulting support and business financing through a wide range of products and services," Kazimov added.
Earlier, Fitch Ratings issued a report saying that the cheapening of Azerbaijani currency, the manat, will adversely affect the capitalization of the country's banking sector.
Fitch said Azerbaijan's banks have a large number of loans in foreign currency and are subject to losses on short currency positions.
Kazimov believes that the changes, taking place in Azerbaijan's economy, can bring some banks to the need to narrow down their operations in the market, and this in turn may affect certain areas of the real sector.
Meanwhile, Kazimov believes that the current situation has opened more opportunities for investing in local production and developing export.
"The government warned the population and the banks that the exchange rate [US dollar] will be rising, however, the agiotage and speculators speeded up this process," he said.
The exchange rate of the US dollar has been strengthening from around 2006, which was promoting economic growth, said Kazimov. "However, taking into account all the macroeconomic changes observed in the global economy, the correction of the exchange rate of Azerbaijani manat is the most right decision, a kind of adjustment of the economic development model."
Kazimov said that throughout this period, the banks didn't pave a way for the artificial reduction of the currency and offered the population dollars depending on the demand.
Nevertheless, he doesn't think that the population's concerns are unfounded, since the issue is related to deposits. "But the government will support the further development of the country's economy and increasing the population's income as before."
"Moreover, the depreciation of the Azerbaijani manat will help replenish the country's state budget [as a result of oil revenues]," he said. "This will allow the country to continue the planned investment programs. This will again have a positive impact on people's income.
Kazimov reiterated that all these changes are the prospects for development and stimulate the banking sector and local business to carry out the work even better."
"The country's economy has been strong enough for the last ten years," Kazimov said. "More opportunities have appeared for the development of local production and exports. This contributes to the diversification of the economy."
There are 45 banks in Azerbaijan. PASHA Bank is a leading corporate bank in Azerbaijan. Founded in 2007, the bank renders a wide range of corporate banking services, including the issuance of loans, transactions on the securities market, asset management and treasury services. Around 329 people work in PASHA Bank, represented by its head office and nine business centers.
The official exchange rate is 1.0496 AZN/USD on March 3.
Edited by CN
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