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EBRD recommends Azerbaijan to prepare new mechanism for lending in national currency (UPDATE)

Business Materials 25 May 2016 15:49
Azerbaijan should prepare a new mechanism to increase lending in national currency, Suma Chakrabarti, president of the European Bank for Reconstruction and Development (EBRD), said at a press-conference in Baku May 25.

details added (first version posted at 12:11)

Baku, Azerbaijan, May 25

By Anvar Mammadov - Trend:

Azerbaijan should prepare a new mechanism to increase lending in national currency, Suma Chakrabarti, president of the European Bank for Reconstruction and Development (EBRD), said at a press-conference in Baku May 25.

"At present, Azerbaijan's economy is highly dollarized and this does not cause any questions," he said. "The issue is when the banks will be able to restore their ability of lending in the country's national currency. For this purpose, the banks should create new mechanisms."

Chakrabarti also expressed concern about the growth of bad loans in Azerbaijan.

"We are concerned about the growth of bad loans in the country, although it must be admitted that such a situation is observed in other countries affected by the devaluation of the national currency," he said.

"We would like this issue, as well as the issue of non-repayment of debts on the whole, to be resolved," he added. Otherwise, the banks will be more conservative in their further actions."

According to the Azerbaijani Central Bank (CBA), the volume of overdue bank loans reached 1,326,500 billion manat in the country in March 2016, decreasing by 0.23 percent for the month.

As of May 25, the official exchange rate is 1.49 AZN/USD.

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