Фото из открытых источников

Фото из открытых источников

Banks continue to squeeze loan portfolios - there is no money

Last year, the Central Bank of Azerbaijan raised 5.9 billion manats of short-term deposits, while in the year before last this indicator was at zero. Against this background, the aggregate loan portfolio continues to decline. So, while as of March 1 this indicator was at the level of 15 billion 395.9 million, then by April 1 it was already stuck at 342.8 million manats.

Basically, the reduction concerns consumer loans, the term of which has expired, is considered in the expert community. That is, on the one hand, people who are no longer burdened with obligations to banks do not intend to re-enter into debt. On the other hand, the banks themselves are not interested in further lending. In addition, according to the results of the first quarter of this year, the volume of loans granted to private financial institutions in a centralized manner reduced: while in February they received 429.4 million manats, in March it was 403.3 million manats.

Independent experts state there are close causal factors between the fall in lending volumes and the growing demand for the Central Bank's deposit auctions. Thus, during the last auction for placement of short-term notes of the Central Bank for the amount of 25 million manats with a circulation term of 28 days, the country's main bank sold 90% of notes, and applications for 21.81 million manats were submitted by three investors. The cut-off price for competitive bids was determined at almost 99 manats with a yield of 15%, which indicates a profitable offer.

Judging by this coincidence, deposits and notes of CBA have become the only source of earnings for commercial banks, which, in fact, explains the sharp drop in the loan portfolio. In general, from January to early April, the regulator registered a prospect of emission of AZN 260 million. “The figures speak for themselves, the statistics exhaust the issues of lack of money, as the funds rotate in the banking system itself,” the economist Samir Aliyev wrote on his Facebook page.

In such a simple way, the regulator of financial flows is trying to keep the rate of the national currency from falling. At the same time, according to the expert, in January-February 2016 the State Oil Fund and the Central Bank sold over 2 billion 39 million dollars through auctions. In the same period of 2017, the foreign exchange market received a little more - 2 billion 80 million dollars. “Total 793.4 million was sold through auctions, and the remaining 2,279 million manat was transferred to the Central Bank to maintain macroeconomic stability. About 1.8 billion dollars was spent on maintaining the stability of the foreign exchange market. Along with this, strict administrative measures are being taken, such as the compression of the money supply, the restriction of imports and cash transactions, which also keeps the Azerbaijani currency afloat,” Aliyev said.

Against the backdrop of so many restrictive measures and the flow of dollars to the foreign exchange market, the demand for US currency does not fall, as there are internal and external obligations, the expert notes. According to him, in the absence of an alternative, the only donor of the foreign exchange market is the State Oil Fund and if the restrictions are removed, the demand for the dollar will begin to grow. -0—

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