Reduction of interest rates on loans & deposits expected in Azerbaijan

Finance Materials 2 May 2019 14:52 (UTC +04:00)

Baku, Azerbaijan, May 2

By Kheyraddin Nasirzade - Trend:

Interest rates on deposits may be reduced, and interest rates on loans may be adjusted in Azerbaijan, chairman of the board of Azerbaijan’s Unibank Faig Huseynov told Trend.

Huseynov noted that changes in interest rates will depend on the market and its monetary liquidity.

The demand for loan products will also have an impact on the formation of interest rates in the market, he said.

He added that if economic processes in the market proceed in the right direction, a trend of lower interest rates is expected regarding both deposits and loans.

Huseynov also noted that the decrease in interest rates may lead to an outflow of deposits. He sees securities as an alternative to deposits, but the securities market is still at the development stage.

As of January 2019, the average interest rates on loans in Azerbaijan amounted to 14.4 percent for manat loans and 7.89 percent for loans in foreign currency, according to the Central Bank of Azerbaijan (CBA).

Rates on loans for individuals in manats amounted to 17.34 percent, in foreign currency - 14.55 percents. For legal entities, the rates amounted to 9.31 and 5.95 percent, respectively.