![Decline in interest rates has a positive impact on the Central Bank"s credit policy of commercial banks - expert](https://turan.az/resized/media/2014/main/050100077248-750-500-resize.webp)
Decline in interest rates has a positive impact on the Central Bank"s credit policy of commercial banks - expert
Discount rate of the Central Bank of Azerbaijan has been reduced from the 1st of May from 4.75 % to 4.25 %. This decision was taken by the CBA Board on April 30.
The central bank justified its decision with low inflation (2 % in the first quarter on an annualized basis), as well as the desire to improve the investment activity in the non-oil sector of the economy, support for the diversification of the national economy. It also aims to ensure the sustainability of falling bank interest rates for business.
In the public association Promoting Economic Initiatives (PEI ) they considered as a positive step the CBA action, at the same time believe that interest rates may be lowered to 2-3%.
PEI expert Samir Aliyev told Turan that the decline in interest rates on centralized credit resources, though slightly, nevertheless, on the background of falling interest rates on deposits will affect the credit market. However, he believes that unlike other countries, the impact of interest rates on the interest rates of commercial banks is weak. The main factors of this phenomenon are centralized distribution of resources between a limited number of banks and their meager amount, although in recent years there has been a trend of increasing centralized credit resources. If in 2008 they accounted for 3.2% of the loan portfolio, in 2013 this figure reached 20%.
According to a member of the Economic Policy Committee of the Milli Majlis Vahid Ahmedov, for the normal development of the economy the CBA accounting rate could be reduced to 3 %. And for business efficiency, bank interest on commercial loans should not exceed 15 %. However, the deputy believes that this reform is needed in other areas of business regulation. -08B-
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- 1 May 2014 15:26
Economics
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