![Fitch Ratings: Government Should Help Banks in Azerbaijan](https://turan.az/resized/media/2015/main/122300141386-750-500-resize.webp)
Fitch Ratings: Government Should Help Banks in Azerbaijan
The international agency Fitch Ratingss believes the devaluation of December 21 (48%) will have the most impact on the banking sector of Azerbaijan.
According to its experts, the reason is that the country has an extremely high level of dollarization of loans (over 55%) and deposits (80%). In addition, there is a risk of reducing the capital adequacy of financial and credit institutions. By the end of the year several banks will not comply with the minimum prudential standards, and in the medium term, the devaluation will have a negative impact on the quality of banks' assets.
Most borrowers in the country do not have income in foreign currency, so their ability to service the debt will be affected. So the Central Bank should provide the necessary support to banks as needed to ensure their liquidity.
"A small proportion of these entities in the local economy (total assets accounted for by December 1 were 50% of GDP) also allows the government to provide them with the necessary support. In addition, the government has a significant buffer in the form of assets of the State Oil Fund, which as of October 1 were $ 34.7 billion, or 65% of GDP," experts stress.
According to the agency, the devaluation has some pluses - there has been a growth in oil revenues in manats, which will contribute to the stabilization reserve. Recall Azerbaijan is still highly dependent on oil and gas. They account for 95% of exports, 75% of revenues and 40% of GDP in 2015," the message underlines. --17D-
Economics
-
Azerbaijani President Ilham Aliyev has signed amendments to two presidential decrees, refining the roles and appointments of the State Customs Committee's representatives abroad, including in international organizations.
-
Auditing organizations and independent auditors in Azerbaijan concluded 7,232 contracts valued at 133.2 million manats ($78.4 million) in 2023, reflecting increases of 20% in the number of contracts and 7.1% in their total value compared to the previous year, according to the Chamber of Auditors.
-
The third meeting of the auction commission was held to evaluate the proposals submitted by participants in the auction for the Gobustan Solar Power Plant project, supported by the European Bank for Reconstruction and Development (EBRD). The meeting focused primarily on determining qualification eligibility and selecting the auction winner, according to the State Agency for Renewable Energy Sources.
-
There is no sensationalism in the recent renaming of the Azerbaijani ship Karabakh to Mingachevir; the new name was given to the ship to ensure that two vessels would not operate under the same name, the Merchant Fleet of Azerbaijan Caspian Shipping Company (ASCO) CJSC told Turan.
Leave a review