Azerbaijan has introduced sparing asset reserve requirements with elements of risk. If the rate of poor assets amounted to 30%, now under the rules of the Central Bank of Azerbaijan it is a quarter of the total value; risky assets decline from 60 to 50%.
This is related to the devaluation of the manat, which caused decline in credit, both individuals who have received loans, as well as legal entities. It is no secret that these loans must be repaid in foreign currency, primarily in US dollars. In addition, banks have deposit liabilities, and they, too, are mostly in foreign currency, as there was a mass of dollarization of deposits against the backdrop of the increasing distrust of government.
That is why the Central Bank’s steps to mitigate the requirements for the formation of bank reserves are justified, as they are aimed at keeping the players on the financial market and to better cover their potential losses.
The new rules came into effect on January 6 and are published on the website of the Register of legal acts.
The country has 43 banks with 758 branches and 165 sub-branches. --17D-
Economics
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