Moody's: Azerbaijani banks less vulnerable now

Finance Materials 19 March 2020 20:45 (UTC +04:00)
Moody's: Azerbaijani banks less vulnerable now

BAKU, Azerbaijan, March 19

By Eldar Janashvili - Trend:

Presently, Azerbaijani banks are less vulnerable than during the 2014-2015 crisis, Trend reports on March 19 referring to Moody's Investors Service Limited’s report on banking sector of Azerbaijan, Russia and Kazakhstan.

“A tightening of regulations following the 2014-2015 crisis, coupled with improvements in banks' own risk management and credit underwriting, has resulted in increases in liquidity and capital buffers and declines in dollarization at banks, making them less vulnerable to oil price shocks this time around,” the report said.

Moody's stressed that a collapse in oil prices may adversely affect the creditworthiness of banks involved in the export of energy raw materials and weaken national currencies, reducing the capital adequacy of banks with great foreign exchange assets.

“The Russian ruble has lost 23 percent of its value against the US dollar as of March 18, 2020 since the beginning of this year,” the report said. “The Kazakh tenge has also depreciated 14 percent during the period.”

“Nevertheless, the rate of the Azerbaijani manat is at a stable level and even grows amid the currencies of neighboring countries and major partners,” the report said. “Demand for the purchase of foreign currency by banks also remains extremely high.”

The Central Bank of Azerbaijan jointly with the State Oil Fund of Azerbaijan held a currency auction, in which $243.7 million were attracted from the banks. The demand was fully met.


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