On February 23, the international rating agency Moody`s warned that the assets of Azerbaijani banks are at risk.
As reported by Bloomberg, this assessment came after Azerbaijan, a major oil producer, on February 21 dramatically lowered the rate of the national currency against the dollar and the euro.
In this regard, on Monday Moody`s exposed "negative outlook" for Azerbaijani banks such as JSC International Bank and JSC VTB.
The move had a negative impact on asset quality due to the borrowers’ pressure on banks and the borrowers' ability to repay loans.
At the same time, liabilities of banks in foreign currency were denominated.
Currency devaluation will encourage depositors to transfer manat deposits into foreign currency, analysts from Moody`s believe. -02D-
Economics
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Azerbaijan’s economy, which is heavily dependent on oil revenues, faces a stark warning in the 2021 report by Carbon Tracker titled “Beyond the Oil States: The Urgent Need to Reduce Dependence on Oil in the Context of the Energy Transition.” The report ranks Azerbaijan among the most vulnerable oil-dependent countries, placing it in the "5th group" — a category reserved for nations expected to experience a decline in oil and gas revenues exceeding 40% over the next decade. This group includes Angola, Bahrain, Timor-Leste, Equatorial Guinea, Oman, and South Sudan, highlighting shared economic risks for these states.
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Azerbaijan's non-oil and gas exports rose 3.5% year-on-year to $2.8 billion during the first ten months of 2024, the Center for Analysis of Economic Reforms and Communication (CAERC) reported in its November "Export Review."
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Azerbaijan Railways CJSC (ADY) will modify the schedules for commuter and domestic trains in line with the Cabinet of Ministers' decision to adjust work and rest days in November, aiming to ensure safe and comfortable travel during the COP29 event, the company announced.
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In Azerbaijan, the government has increasingly relied on tax exemptions for imported goods as a tool to stabilize domestic market prices. The exemption from the 18% VAT on wheat imports, extended this year, exemplifies this approach. New measures have also been introduced, including tax relief on imports of electric vehicle chargers, while exemptions for high-cost medications are currently under discussion. Notably, defense imports continue to be free from taxes and customs duties.
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