BAKU, Azerbaijan, Jan.6
By Zeyni Jafarov - Trend:
Fluctuations that were observed in the currency market of Azerbaijan in early 2020, affected the volume of deposits, leading to a decrease in the population's savings, the Accounts Chamber stated in its opinion for the country’s 2021 state budget, Trend reports.
According to the chamber, the negative impact of the COVID-19 pandemic also affected the banking sector of the country. Thus, the population's deposits, which in the early 2020 had a nearly 4 percent growth rate on an annual basis, declined by 5.3 percent in March, and in the following months the decrease rate reached double-digit levels due to the revocation of licenses from some banks.
The growth seen in early 2020 was replaced by a 4.1 percent decline by the end of October. The weakening in growth rates compared to the same period of 2019 can be explained by a decrease in foreign currency deposits.
For 10 months of 2020, deposits in the national currency increased by 11.6 percent year on year, while deposits in foreign currency lowered by 13.2 percent, despite the 4.1 percent growth observed in early 2020.
For comparison, as of early 2015, deposits in foreign currency had a decisive share (80 percent) in the banks' portfolio during the devaluation waves, but over time this share began to decline. During 2020, especially in March, this ratio changed and by the late 2020 declined by 3.6 percentage points compared to the end of 2019.
Deposits in foreign currency accounted for 57.4 percent of the total deposit portfolio of Azerbaijani banks.