Weekly review of events in financial market of Azerbaijan

Finance Materials 23 August 2020 21:58 (UTC +04:00)
Weekly review of events in financial market of Azerbaijan

BAKU, Azerbaijan, Aug. 23

By Eldar Janashvili - Trend:

The International Finance Corporation (IFC) signed an agreement with the Central Bank of Azerbaijan (CBA) at the beginning of this week (08/17/2020 - 08/21/2020), to launch digital payments in the country, Trend reports.

The agreement is part of IFC's efforts to foster innovation and competition in Azerbaijan's financial sector.

The IFC will work with the CBA to create a regulatory ‘sandbox’ - a special regime that allows banks and companies to test innovative financial services and products. The project will contribute to improving the instant payment system and will allow customers to access banking services electronically without visiting bank branches, thereby facilitating access to them.

Another important event in the financial market of the country was the announcement that a united agricultural insurance company will be created in Azerbaijan for the first time. The constituent assembly on the establishment of Agrarian Insurance Company OJSC was held on July 24. Seven insurance companies, which intend to participate in the company's activities, were represented at it. As a result of the meeting, it was decided to establish the company.

Also, last week, the A-Group insurance company celebrated its 25th anniversary. The press service of the company said that A-Group over the years managed not only to maintain business performance, but also the main values ​​- customers, partners, and team.

Moreover, First Deputy Chairman of the Board of AccessBank OJSC Yevgenia Gashikulina told Trend in an interview that the bank restructured about 10,000 loans in the first half of 2020, since many of the bank's customers faced difficulties in repaying loans due to the introduction of strict quarantine measures. AccessBank’s management took timely measures in this direction.

The Azerbaijan Banks Association (ABA) in an interview with Trend revealed the reasons for the global decline in lending in the country. As it turned out, the decrease in credit investments in the country's economy by 4.9 percent is only partly related to the spread of the coronavirus (COVID-19) pandemic, but mainly due to other factors, such as the liquidation of four banks: Atabank, AG Bank, AMRAH Bank, and NBC Bank.

The ABA also noted that another factor influencing such a reduction can be considered the fact that some entrepreneurs, fearing the volatility of the exchange rate, which could result from sharp fluctuations in prices in the oil market, prematurely closed their loans in foreign currency.

Last week, the State Statistical Committee of Azerbaijan disclosed macroeconomic indicators, according to which, from January through July 2020, Azerbaijan's GDP decreased by 2.8 percent compared to the same period of 2019, amounting to 40 billion manat ($23.5 billion).

According to the committee, in the oil and gas sector of the economy, added value decreased by 1.6 percent, and in the non-oil sector - by 4.5 percent, thereby making GDP per capita 4,015.1 manat ($2,361.8).

In addition, the revenues of the state budget of the country increased. According to reports, the state budget revenues amounted to nearly 14 billion manat ($8.2 billion) in the first half of this year, which is 12.1 percent more compared to the first half of last year.

Thus, the last week was marked by a drop in oil prices and a continuing rise in the EUR/AZN rate.

(1 USD =1.7 AZN on Aug. 23)