Experts of CBA Decision to Suspend Requirements for Open Currency Position Limits for Banks
The CBA decision to suspend the requirement for open currency position limits for banks in the country does not mean preparation for the transition to free determination of the national currency. Turan was told by the economist Samir Aliyev.
Some citizens, including ignorant entrepreneurs, accept the decision of the Central Bank as a sign of impending new devaluation.
Open foreign currency position is the difference between assets and liabilities in foreign currency. This difference creates a risk of loss of funds under conditions unfavorable for banks in changes in the exchange rates.
As of February 1 of this year, banks' assets in foreign currency amounted to about 3.1 billion in manat equivalent. Their liabilities denominated in foreign currencies are expressed in 4 billion 935 million manat. For a month they were reduced by 54.5 million and 50.1 million in manat equivalent respectively.
According to the economist Fariz Huseynli, the Central Bank suspends the requirements for currency risk and provides banks with a certain freedom. Temporary suspension of restrictions on foreign exchange transactions is a kind of signal: do not give loans in dollars, make the sale of foreign currency. At the same time, he believes that after the devaluation the main risk for the foreign exchange position of banks is the problem of repayment of loans granted in foreign currency. "We cannot solve the problem of the exchange rate difference due to credit risk," emphasizes Huseynli.
Experts believe that the CBA took the right decision: to give banks 'break time' so that they themselves were able to recover the foreign exchange position, and not with the help of the Central Bank.
Turan visited several exchange points in Baku. They still face limits on the purchase and sale of foreign exchange on daily basis. Thus, the suspension of the Central Bank requirements for open currency position limits does not mean any complete rejection of banks from currency risks, as it is one of the requirements of the Basle Committee on Banking Supervision. ----08B
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