The foreign assets of the banking sector of Azerbaijan for the period prior to the devaluation (January 2015) increased from 4 billion to 5.9 billion US dollars or 47.5% in April 2016. At the same time, foreign liabilities of banks declined from 6.3 billion to 4.9 billion dollars.
According to the economist Rovshan Agayev, before the devaluation of the manat the Azerbaijani banks' foreign liabilities exceeded their assets of the kind by $ 2.5 billion. Today there is a negative balance of $ 1.3 billion.
According to the expert, this trend can be explained with two factors: the banks are trying to reduce their foreign liabilities; deterioration of their credit rating, and sharp decline in the real sector’s need for bank loans.
Note that, among others, foreign assets include cash in foreign currency, and foreign liabilities include deposits of foreigners in foreign currency.
Note that the increase in the foreign assets of banks took place against the background of the loss of value of many foreign currencies to the Azerbaijani manat on average by 7-8% for the last 2-3 months. ---08D
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