BAKU, Azerbaijan, Jan. 13
By Zeyni Jafarov - Trend:
Despite a significant deterioration in the international environment, the balance of payments in Azerbaijan has maintained an equilibrium, the Central Bank of Azerbaijan (CBA) told Trend.
According to the CBA report, over the three quarters of 2020, the current account deficit amounted to only 0.7 percent of GDP. The foreign trade balance, which is the main component of the balance of payments, was in the positive zone, despite the decline.
The Central Bank stressed that the strategic foreign exchange reserves of Azerbaijan during 2020 remained almost stable and exceeded the volume of the gross domestic product (GDP), reaching $50 billion.
Commenting on the situation in Azerbaijani banks, the CBA noted that the adequacy of capital, significantly exceeding the regulatory requirements of the banking sector, is sufficient to cover losses from insolvent creditors.
“So, by December 2020, local banks increased their share capital for a total of 116.7 million manat ($68.6 million). The liquid assets of the banking sector currently amount to 9 billion manat ($5.29 billion), and the urgent liquidity ratio in the banking system is 59 percent, which is almost twice the standard of 30 percent,” said the Central Bank.
The decline in economic activity and income of enterprises and households, observed against the background of the introduced quarantine measures and restrictions in some areas of economic activity, did not remain without consequences for the financial sector. In this regard, and taking into account the continuation of measures to support coronavirus-hit businesses, it was deemed expedient to extend the period of benefits related to loans also in 2021,” the CBA added.
Earlier, the CBA Chairman Elman Rustamov said: “Despite the events associated with the coronavirus pandemic and the Patriotic War of Azerbaijan for the liberation of its lands from the Armenian occupation, the financial sector is completing 2020 with good indicators.”