Weekly economic review

Supported by the Government of Azerbaijan and CIS Executive Committee, the Financial-Banking Council of CIS organized a banking conference of the CIS participating countries titled 'CIS Financial Market: Development and Integration'.

Actively attended by the heads of the leading banks and CIS governmental representatives, firstly the conference was dedicated to the anti-crisis measures preventing the global financial crisis which today seriously affects the CIS countries. Discussions were organized over the problems of co-operation and integration in the financial-banking and investment spheres.

It was mentioned during the meeting that no banking system in the world, including Azerbaijani banking system, has immunity from crisis. The CIS banks, at least, the largest of them faced sufficient rigid while entering the international markets. Today the financial crisis mostly affected the Kazakhstan and Ukrainian banks, which are most deeply integrated into the global financial system.

"Financial sector in all countries of world experiences the problems of liquidity, but the foreign liquidity of Azerbaijan today exceeds $17bln, but the foreign debt of the country, taking into account the debts of private sector, does not exceed $8bln," said the Head of the National Bank of Azerbaijan, Elman Rustamov. "The only question in the banking sector can be the external debts of the banks, which today totals $2bln," said the Head of NBA.

During the conference, discussions were held on the issue of money transfers between the CIS countries. As known, all transfers in the CIS are realized in Euro and USD, but now drop is recorded in these currencies and therefore, the question is to increase operations in the reserve national currency.

" Russia has already made a decision to make ruble reserve currency, and other CIS countries also can propose their national currencies as reserve currencies," Alatoliy Kazakov, chairman of Coordinating Board of CIS Financial-Banking Council said in Baku.

In addition, he said that Russia is already taking measures to build international financial center (IFC), which will give an opportunity to unite the CIS countries. "The IFC is envisaged to be established by 2020. The CIS countries need to combine efforts to establish financial-banking market of the CIS countries in order to avoid negative affects of such crisis," Kazakov said.

In the end of the conference, a decision was made that Azerbaijan will become annual center for holding international banking conference of the CIS participating countries. The next conference in Baku was scheduled for October 2008.