Share of Problem Loans in Azerbaijan to Exceed 10% - Fitch Ratings
Another review of the international rating agency Fitch on dollarization in banks of the CIS and Georgia (Dollarization in CIS / Georgian Banking Sectors) has been published.
According to the authors, the Azerbaijani banks with a high level of dollarization due to lack of regulatory support together with Ukrainian counterparts were most severely affected by the significant devaluation of the national currency. Not a softer blow fell on the banks of Russia, Belarus and Kazakhstan, while less serious consequences were experienced by Armenian and Georgian banks, although their currency also slipped against the dollar.
In addition, local banks have lost in foreign currency because of the short open positions and limited hedging. Dollarization also affected the growth of the share of problem loans, which by the end of the year is expected to reach more than 10% (now it is about 7%), and the capital adequacy.
After the devaluation of the manat the “center of gravity” of USD in Azerbaijan has shifted to deposits - their concentration in the US currency accounted for more than 60%, along with the banks of Georgia, Kazakhstan and Belarus, which also show a high level of lending in foreign currency (66%).
In Azerbaijan, the decrease in oil prices has led to a problem with the capitalization of financial institutions, which has a lot of pressure on this sector of the economy, the report said. --17D-
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- Economics
- 16 May 2016 13:43
Economics
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On July 26, the Ministry of Economy hosted a meeting with entrepreneurs from the non-oil industry to explore ways to stimulate local production and enhance export potential.
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Azerbaijani internet service providers Aztelekom and Baktelekom will introduce substantial changes to their pricing structure starting August 15, the companies announced today. Under the new tariffs, the minimum internet speed will rise to 100 Mbit/s, with the cost per Mbit/s decreasing from 0.45 AZN to 0.25 AZN. As a result, monthly charges will be set at 25 AZN for 100 Mbit/s, 30 AZN for 150 Mbit/s, and 36 AZN for 250 Mbit/s.
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Independent experts suggest that Azerbaijan may be on the verge of another devaluation of its currency, the manat, due to a shrinking trade and payment surplus. The anticipated economic adjustments come amidst a decline in foreign currency inflows and reduced oil production.
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Azerbaijan’s Foreign Minister Jeyhun Bayramov met today with Ahmed Moallim Figi, the Minister of Foreign Affairs and International Cooperation of Somalia, at the Azerbaijani Foreign Ministry. This meeting followed a discussion held the previous day between Figi and Azerbaijan’s Economy Minister Mikail Jabbarov.
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