Risks of Banking System of Azerbaijan Come from Half of Deposits Placed in Foreign Currency
Azerbaijan, Ukraine, Kazakhstan, and Nigeria have got to the list of countries with high risks for the banking system.
According to the report of Standard & Poor`s, in the case of Azerbaijan it is due to the fact that half of the deposits are placed in foreign currency.
"Significant risks are generated by financial and credit institutions of those countries whose companies have assets and liabilities denominated in different currencies, as well as large unhedged foreign currency positions," said the agency.
According to the report, in increasing the cost of borrowing in foreign currencies, these factors will affect the profitability of banks.
Azerbaijan is referred to the EMEA (Europe, Middle East, Africa). The report entitled "How the depreciation of currencies in the countries of the EMEA increases the risks for the banks" notes that "for the region's banks there are risks caused by over-reliance on funding in foreign currency and a significant share of foreign currency deposits, as, for example, in Azerbaijan, where the share of foreign currency accounts for about half of all deposits." --17D-
Economics
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