Head of CBA Announces Growth of Country's Foreign Exchange Reserves, Decrease in Discount Rate

Baku / 30.07.20 / Turan: Strategic foreign exchange reserves (SFER) of Azerbaijan in January-July increased by 1.2% to $ 51.7 billion, the head of the Central Bank (CB) Elman Rustamov said at a press conference on July 30.

At the same time, the foreign exchange reserves of the Central Bank itself have increased by 3.3% since the beginning of the year from the figure at the end of 2019 of $ 6.2 billion.

Of the total volume of Azerbaijan's SFER, over $ 43.2 billion are the assets of the State Oil Fund, over $ 6.4 billion are the reserves of the CBA, and the rest is government deposits (treasury funds of the Ministry of Finance).

The growth of the CBA's reserves was mainly due to the fact that some of the funds were in foreign management, as well as due to currency swaps.

At SOFAZ, about $ 2 billion has been allocated for management by foreign managers.

It should be noted that the peak level of Azerbaijan's foreign exchange rate was recorded in January-September 2014 - $ 53.7 billion, but the subsequent devaluation of the manat, the fall in Azerbaijan's oil revenues led to a decrease in the country's foreign exchange reserves.

According to the head of the CBA, in the second half of the year, the country was able to achieve macroeconomic stability against the backdrop of negative global processes associated with the coronavirus pandemic.

“Stabilization of oil prices, a stable macroeconomic situation in Azerbaijan and low inflationary expectations have led to a decrease in the discount rate in the country since July 30,” Rustamov said.

The Central Bank of Azerbaijan (CBA) on Thursday decided to reduce the discount rate from 7% to 6.75%, while the lower threshold of the interest rate corridor was reduced from 6.5% to 6.25%, the upper threshold - from 7.5% to 7 , 25%.

The next decisions on the parameters of the interest rate corridor will be made in accordance with the change in the balance of risks, alignment of priorities to support economic activity with the goals of macroeconomic stability (the CBA meeting on the discount rate is scheduled for September 18, in accordance with the schedule).

Referring to the situation in the country's banking sector, Rustamov, in particular, said that the issue of blocked deposits of customers of liquidated banks in the amount of 80 million manats would be resolved in the near future, and there was a corresponding decision of the Constitutional Court.

To remind, the CBA in April-May made a decision to cancel the licenses of 4 banks - AtaBank, Amrahbank, AGBank and NBCBank due to problems with capital and low level of solvency.

These banks are declared bankrupt and are being liquidated (liquidator - ADIF).

According to ADIF data, almost 15 thousand depositors of these banks received compensation in the amount of over 305.2 million manats.  -0--