Currency reserves of the Central Bank of Azerbaijan (CBA) increased by about $1,243.2 million (31 percent) up to $5,254.2 million in November 2017 as compared to the same period of 2016.
During the month, CBA reserves rose by 53.5 million, while since early 2017 increased by 1,279.8 million (32.2 percent).
Currency reserves of CBA decreased by more than $1 billion or 20.78 percent in 2016 as compared to 2015.
CBA's currency reserves started to decrease in July 2014. The reduction was at a slower pace (within a range of $20 million to $50 million) at the beginning, but a sharp decline began in December 2014 due to an increase in demand for US dollars in the country.
During 2016, the CBA currency reserves increased by 0.9 percent in March, 1.35 percent in April, 3.97 percent in May, 0.7 percent in August, and 0.14 percent in November.
Currency market and manat rate
A fully floating exchange rate regime has been observed in Azerbaijan since early 2017. During this time the CBA did not resort to serious interventions to maintain the manat rate. First, there was a period of destabilization, which was connected with the expectations of the market participants. This led to a significant decrease in the cost of manat.
However, then the market itself settled the rate and it stabilized. Today, the foreign exchange market is a market of supply, rather than demand. The pressure is made to appreciate the manat rate. Taking into account Azerbaijan's strategic goals, appreciation of the manat in the medium term may create problems for the balance of payments, given the current measures to reduce imports and support exports.
AZN/USD rate increased by 3.99 percent in January-November 2017.
AZN/USD rate increased by 0.0059 percent in November 2017, but remained stable in October 2017.
AZN/USD average rate was 1.7002 manat in November 2017 which is similar with the figure for October 2017.
AZN/EUR rate decreased by 8.17 percent in January-November 2017.
AZN/EUR rate decreased by 2.02 percent in November 2017 (in October, AZN/EUR rate increased by 1.3 percent).
Azerbaijani monetary market
The money supply rate (M2) (cash in circulation outside banks) and remainders in the national currency on accounts of non-financial organizations, financial organizations (excluding credit organizations and individuals) amounted to 12.04 billion manats in November 2017 increasing by 4.2 percent within the month and by 10.1 percent within the year, the Azerbaijani Central Bank said in a report.
The amount of cash money supply (M0) increased by 22.6 percent for the year from 5.83 billion manats to 7.15 billion manats.
As of November 2017, Broad Money Supply (M3) totaled 21.52 billion manats or by 6.2 percent more compared to November 2016 and by 0.3 percent more than in late October 2017.
The transaction money (M1) increased by 20.5 percent during the year and by 4 percent as compared to late October 2017 and amounted to 10.11 billion manats.
Parameters of monetary market, in million manats:
|
Monetary market parameters |
Volume, November 2017 |
|
Money mass in extensive understating (М3) |
21,517.9 |
|
Money mass on manat (М2) |
12,044.7 |
|
Cash in manat (М0) |
7,149.8 |
|
Non-cash in manat |
4,894.9 |
As of December 1, 2017 bank reserves amounted to 2.19 billion manats in Azerbaijan that is by 19.5 percent less than in November 2016 (2.72 billion manats).
According to a report of the Central Bank of Azerbaijan, as of late November 2017, expanded monetary base slightly exceeded 10 billion manats (an increase of 10.4 percent as compared to the same period of 2016) in the country.
This indicator stood at 9.06 billion manats in late November 2016.
The report says that as of December 1, 2017, the monetary base totaled 8.69 billion manats as compared to 7.7 billion manats in December 2016.
During the period, the amount of cash in circulation was 7.76 billion manats, while this figure stood at 6.33 billion manats as of December 1, 2016.
The ratio of cash in circulation to monetary base as of December 1, 2017 amounted to 77.6 percent, increasing by 7.7 percentage points as compared to late November 2016.
Azerbaijan's loan market
As of early December 2017, the Azerbaijani credit organizations' loans totaled almost 12.23 billion manats, which is by 0.6 percent more as compared to early November 2017, the report of the Azerbaijani Central Bank (CBA) said.
The volume of loans, issued by the Azerbaijani credit organizations, on the contrary, decreased by nearly 25 percent for the year, said the report.
Loans in Azerbaijan's national currency, the manat, prevail in the structure of the issued loans.
Some 59.37 percent (7.26 billion manats) of all loans account for those loans. Their volume decreased by nearly 15.6 percent during the year. Foreign currency loans account for 40.63 percent or 4.9 billion manats. Their volume decreased by 35.3 percent as compared to November 2016.
In general, the total volume of overdue loans in Azerbaijan reached 1.89 billion manats. Their share in the loan portfolio of the country's banks and non-banking credit organizations as of November 2017 reached 15.46 percent.
In November 2017, the volume of overdue loans in Azerbaijani national currency reached 971.4 million manats, which is by 52.3 percent more as compared to the same period of 2016.
In November 2017, overdue loans in foreign currency amounted to 918.9 million manats, which is by 14.22 percent more as compared to the same period of 2016.
Average interest rates on bank loans decreased in national and foreign currencies in Azerbaijan in November 2017 compared to October 2017, the report of the country's Central Bank (CBA) said.
The rates on manat loans increased for both individuals but decreased for legal entities, according to the report. Meanwhile, the rates on foreign currency loans increased for both individuals and legal entities.
Comparative table of interest rates on loans in national and foreign currencies:
|
Average interest rates |
Rates on loans for individuals |
Rates on loans for legal entities |
|
|
November 2016 |
|||
|
Manat loans |
12.18 |
8.36 |
16.07 |
|
Foreign currency loans |
9.16 |
5.71 |
17.3 |
|
October 2017 |
|||
|
Manat loans |
13.14 |
8.99 |
16.3 |
|
Foreign currency loans |
10.53 |
7.23 |
17.34 |
|
November 2017 |
|||
|
Manat loans |
13.09 |
8.82 |
16.38 |
|
Foreign currency loans |
10.37 |
7.15 |
17.22 |
The volume of bank crediting to the agricultural sector in Azerbaijan totaled 430.8 million manats in January-November 2017 that is by 3.3 percent more than in the same period of 2016, says a report of the country's Central Bank.
Almost all loans - 430.5 million manats - were issued to companies operating in the private sector.
State-owned enterprises obtained loans worth 0.3 million manats during the period.
According to the report, a major part of the loans (403.7 million manats) were provided for the long term period, the volume of short-term loans totaled 27 million manats. All loans issued for the state-owned enterprises were long-term loans.
More than 81 percent (350.7 million manats) of all loans were issued in national currency. The share of foreign currency prevailed only in short-term loans, and accounted for 59.3 percent (16 million manats).
Thirty banks operate in Azerbaijan, including two state-owned banks.
Total volume of crediting by banks and non-bank credit organizations amounted to 12.22 billion manats in January-November 2017 that is by almost 25 percent less than in the same period of 2016.
Loans worth 2.07 billion manats were issued to the population in Azerbaijani districts in November 2017, that is, 16.9 percent of the total loan portfolio of banks, which is by 16.5 percent less than in November 2016, according to the report of the Central Bank of Azerbaijan (CBA).
According to the CBA, in early December 2017 the loans worth 10.16 billion manats were issued in Baku, which is by 4.9 times more than in the districts. Almost 5.69 billion manats (56 percent of total lending volume in Baku) accounted for the loans in national currency.
The average annual interest rate on loans in the country as of November 2017 was 11.9 percent, while 10.5 percent in Baku.
|
Districts |
Lending volume (thousand manats) |
Average interest rate |
|
|
In total |
Including manats |
||
|
Absheron |
460,345.5 |
344,837 |
15.5 |
|
Aran |
498,388.9 |
367,241.1 |
22.6 |
|
Mountain Shirvan |
71,841.3 |
52,576.6 |
21.6 |
|
Ganja-Gazakh |
429,779.1 |
321,096.7 |
19 |
|
Guba-Khachmaz |
145,190.9 |
115,007.1 |
19.8 |
|
Lankaran |
174,589.2 |
125,581.3 |
22 |
|
Sheki-Zagatala |
143,373.3 |
101,590.4 |
20.8 |
|
Upper-Karabakh |
43,005.5 |
38,043.7 |
19.2 |
|
Kalbajar-Lachin |
673.1 |
508 |
14.7 |
|
Nakhchivan |
101,081.9 |
99.904 |
8.5 |
The average interest rate on deposits in banks of Azerbaijan decreased both in national and foreign currency in November 2017, the Azerbaijani Central Bank's report said.
According to the report, the average rate on bank deposits in manats made up 10.3 percent in November 2017 compared to 10.33 percent in October 2017 and 6.36 percent in November 2016.
The average rate on deposits in foreign currency amounted to 3.05 percent in November 2017 compared to 3.33 percent in October 2017 and 4.68 percent in November 2016, the report said.
According to the report, the banks drew deposits of legal entities in manats in the amount of 5.17 percent per annum in November 2017 compared to 5.42 percent and 3.79 percent in October 2017 and November 2016 accordingly.
The funds on the accounts denominated in the foreign currency brought 1.39 percent to legal entities in November 2017, 1.37 percent in October 2017 and 3.2 percent in November 2016, the report said.
As of Dec. 1, 2017, the average interest rate on deposits of physical entities in manats made up 11.74 percent compared to 11.83 percent as of late October 2017 and 10.18 percent in November 2016, the report said.
According to the report, the interest rates on deposits of physical entities in foreign currency are as follows: 3.76 percent in November 2017, 4.1 percent in October 2017 and 5.6 percent in November 2016.
Mortgage lending
In November 2017, Azerbaijan Mortgage Fund (AMF), presently Azerbaijan Mortgage and Credit Guarantee Fund CJSC, issued loans worth 23.5 million manats.
The issuance of mortgage loans was suspended in the same period last year due to the restructuring of the AMF.
According to the CBA report, in November 2017, the volume of refinancing of loans issued by banks earlier amounted to 21.1 million manats. Since the beginning of the year, 44.7 million manats has been transferred from the state budget to the AMF.
The average monthly amount of the loan delivered by the AMF's authorized banks was 44,435.6 manats in November 2017 (40,945.6 manats in November 2016). The average period of the loan is 281 months (280 months a year earlier). The average annual interest rate is 6.64 percent (6.69 percent a year earlier). The average monthly amount for payments is 317.3 manats (295.8 manats a year earlier).
In general, AMF's authorized lending institutions have issued 20,859 mortgage loans worth 915.14 million manats since 2006 and up till now.
According to the new mortgage loan issuance order, approved in June 2016, an ordinary mortgage loan will be issued only to Azerbaijani citizens and only in the national currency for a term from 3 years to 25 years, while preferential mortgage - up to 30 years to purchase a house, owned by the citizen. Interest rates on conventional mortgage must not exceed eight percent, while 4 percent per annum in preferential mortgage loan.
The maximum amount of the mortgage loan (including preferential) is determined by Azerbaijan Mortgage Fund JSC and must not exceed the cost of repaired housing with an average of 100 square meters in zone #7 in Baku. Annual interest rates on the loan are determined by the company's Supervisory Board.
The amount of preferential mortgage loan must not exceed 85 percent of the cost of purchased housing by the date of the loan issuance, except for cases when a borrower appeals to decrease the loan amount. The amount of conventional mortgage loan must not be less than 75 percent and more than 85 percent of the cost of purchased housing by the moment of the loan issuance, except for the cases when a borrower appeals to decrease the loan amount.
The monthly payment for a mortgage loan must not exceed 70 percent of a debtor's monthly income. The age of the borrower must not exceed the retirement age according to the legislation. An agreement on life insurance is required.
The family members of war victims, national heroes, internally displaced people, civil servants with at least a three years' experience, teachers of secondary schools with at least a five-year service term, PhDs, doctors of science and those having special merits in sport as well as the military with at least a three-year service term can use the preferential conditions. Each family having the right to such a mortgage loan can use it only once.
Twenty-four out of 30 banks in the country, as well as 16 insurance companies [in total 21] and 11 appraisal organizations are the authorized banks of the Azerbaijan Mortgage Fund.
Azerbaijan's banking sector
As of November 2017, the total volume of deposits of legal entities and individuals in Azerbaijani banks amounted to 19.64 billion manats, according to the report of Azerbaijan's Central Bank.
The deposit base of banks decreased by 0.3 percent in November 2017 and decreased by 13.3 percent for the year.
The volume of deposits in the Azerbaijani national currency, the manat, reached 5.48 billion manats as of November 2017, 3.07 billion manats of which accounted for demand deposits, and 2.41 billion manats - term deposits, the report said.
The volume of deposits in the freely convertible currency reached 14.15 billion manats as of November 2017, 6.12 billion manats of which accounted for demand deposits, and 8.03 billion manats - term deposits, the report said.
Thus, as of December 1, 2017, 25.5 percent accounted for the deposits in manats, and 74.5 percent of the total deposit base of banks accounted for the deposits in foreign currency.
According to the report, the individuals' deposits exceeded 7.37 billion manats in November 2017. Most of the individuals' deposits accounted for the ones in the foreign currency - 69.1 percent or 5.09 billion manats, the report said.
According to the report, the population's deposits increased by 1.2 percent for the month and decreased by 3.2 percent for the year.
The total volume of the legal entities' deposits in Azerbaijani banks reached 12.26 billion manats or by 18.4 percent (15.04 billion manats) less than in November 2016, the report said.
As of December 1, 2017, the volume of the Azerbaijani financial organizations' deposits reached 1.92 billion manats compared to 5.6 billion manats in the same period 2016.
A sharp decrease in the deposits of financial organizations is connected with the restructuring of the International Bank of Azerbaijan.
The volume of the Azerbaijani non-financial organizations' deposits reached 10.35 billion manats compared to 9.44 billion manats as of November 2016.
As of Dec. 1, 2017, the population's bank deposits in Azerbaijani districts (except for Baku) totaled 592.25 million manats, which is 8 percent of all bank deposits, according to the report of the Central Bank of Azerbaijan (CBA).
For comparison, as of late November, 2016, the population's bank deposits in Azerbaijani districts (except for Baku) totaled 505.15 million manats, which is 6.6 percent of all bank deposits.
The volume of deposits in the districts in November 2017 increased amid their decrease in the country.
In November 2016, the population kept deposits worth 7.61 billion manats in the banks.
As of Dec.1, 2017, this figure decreased to 7.37 billion manats.
As of early December 2017, the volume of population's bank deposits in Baku amounted to 6.78 billion manats.
The average annual deposit rate throughout the country reached 4.4 percent, and on Baku - 4.3 percent in November 2017.
Distribution of bank deposits in Azerbaijani districts:
|
Districts |
Amount of deposits (thousand manats) |
Average interest rate (%) |
|
Absheron |
159,998.8 |
6.9 |
|
Aran |
129,298.5 |
3.6 |
|
Mountain Shirvan |
14,271.3 |
4.7 |
|
Ganja-Gazakh |
119,400.2 |
6.2 |
|
Guba-Khachmaz |
42,568.4 |
6.3 |
|
Lankaran |
49,477.6 |
6.1 |
|
Sheki-Zagatala |
34,214.5 |
4.3 |
|
Upper-Karabakh |
7,985.5 |
3.8 |
|
Kalbajar-Lachin |
972.9 |
11.1 |
|
Nakhchivan |
34,062.7 |
2.2 |
In November 2017, average interest rates on interbank loans in Azerbaijan decreased in national currency (manat), but increased in foreign currency, the Central Bank said in a report.
The average interest rates on loans in national currency amounted to 7.89 percent per annum, in foreign currency - 10.71 percent per annum.
Comparative table of interest rates on loans in national and foreign currencies:
|
Average interest rates |
Up to 30 days |
30-90 days |
90-180 days |
180-360 days |
Over 1 year |
|
|
November 2016 |
||||||
|
Manat loans |
7.78 |
1.4 |
17.42 |
13.59 |
6.28 |
8.91 |
|
Foreign currency loans |
5.44 |
4.22 |
16.54 |
10.41 |
5.7 |
4.71 |
|
October 2017 |
||||||
|
Manat loans |
7.94 |
3 |
- |
4.74 |
1.45 |
9.93 |
|
Foreign currency loans |
10.22 |
0.55 |
- |
10.38 |
5.44 |
11.99 |
|
November 2017 |
||||||
|
Manat loans |
7.89 |
3 |
- |
2.57 |
1.45 |
9.94 |
|
Foreign currency loans |
10.71 |
0.43 |
- |
9.77 |
4.53 |
11.99 |
Financial activity of banks
As of late November 2017, Azerbaijani banks' liabilities to the country's Central Bank (CBA) decreased to 548.6 million manats, or by more than three times compared to the volume of liabilities in the same period of 2016, according to the report of the country's Financial Market Supervisory Authority.
For the year, banks have reduced their liabilities by 21.4 percent, from 29.58 billion manats to 23.26 billion manats, according to the report. The main share of liabilities accounted for deposits - 15.72 billion manats (a 6.9 percent reduction since the beginning of the year).
For the year, the assets of the banking sector decreased by 17.2 percent, and amounted to 26.39 billion manats as of December 1, 2017.
The main reason for the assets' reduction was a 25.3 percent decrease in the volume of loan portfolios of banks - to 11.78 billion manats compared to the volume of banks' loan portfolios in late November 2016. Loans allocated to banks and other financial institutions also significantly reduced. For the year, their volume has decreased by 2.6 times, to 285 million manats.
Payment card market
The turnover of payment card transactions carried out via ATMs and POS-terminals amounted to 1.27 billion manats in Azerbaijan in November 2017, which is by 15.74 percent more than in November 2016, said the report of the Central Bank of Azerbaijan (CBA).
According to the report, the total number of payment card transactions reached 8.47 million in November 2017, increasing by 17.1 percent for the year.
The number of debit card transactions reached 7.59 million totaling 1.1 billion manats during the reporting period. Meanwhile, 4.95 million debit card transactions worth 934 million manats were carried out via ATMs, and 646,000 transactions worth 99 million manats via POS-terminals.
The number of payment cards rose by 8.1 percent to 5.77 million in November 2017 as compared to the same period of 2016.
As of December 1, 2017, 2,460 ATMs operated in the country, 1,327 of which are located in Baku and 1,133 - in other cities and districts of the country. The total number of ATMs has increased by 10 units or 0.4 percent for the year.
As of late November 2017, the number of POS-terminals amounted to 66,028 units in the country, 37,857 of which are installed in Baku and 28,171 units in other cities and districts of the country. The number of POS-terminals has decreased by 7,147 units or 11.6 percent in Azerbaijan for the year.
Stock market
Azerbaijan's National Depository Center has registered 2,227 stock exchange transactions for the purchase and sale of securities worth 706.03 million manats in January-November 2017 that is 3 times more than in the same period of 2016, says the statistical data posted on the Center's website.
According to the data, 388 off-exchange transactions worth almost 768.78 million manats were registered in January-November 2017 (3.2 times more for the year).
Meanwhile, 990 transactions worth 6.69 billion manats were registered on additional emission during the reporting period. The volume of such transactions has increased by 36.5 percent in January-November 2017 as compared to January-November 2016.
Volume of transactions in January-November 2017:
|
Concluded agreements |
Exchange transactions, number |
Exchange transactions, in manats |
Off-exchange transactions, number |
Off-exchange transactions, volume |
Transactions on additional emission, number |
Transactions on additional emission, volume |
|
|
January |
2 |
183 |
17,879,720 |
13 |
641,720 |
9 |
648,562,500 |
|
February |
3 |
253 |
155,609,805 |
32 |
184,170,140 |
34 |
270,400,100 |
|
March |
2 |
149 |
51,428,900 |
71 |
31,018 |
54 |
202,992,500 |
|
April |
4 |
196 |
68,580,169 |
21 |
4,323,223 |
80 |
235,991,900 |
|
May |
3 |
221 |
52,125,408 |
29 |
270,117,784 |
86 |
351,035,010 |
|
June |
2 |
174 |
82,323,634 |
30 |
2,750,019 |
74 |
518,006,195 |
|
July |
2 |
218 |
68,982,925 |
64 |
8,840,871 |
88 |
524,714,390 |
|
August |
4 |
253 |
33,180,179 |
31 |
250,893,245 |
118 |
760,500,000 |
|
September |
1 |
151 |
38,898,587 |
22 |
3,811,990 |
143 |
786,478, 385 |
|
October |
4 |
175 |
75,489,499 |
31 |
11,995,780 |
126 |
1,023,470 |
|
November |
4 |
254 |
61,532,950 |
44 |
30,921,176 |
178 |
1,266,005 |