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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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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