$1bn of foreign debt repaid by banks
Azerbaijan`s banks repaid a part of their foreign
debt - $1 billion - in 2008, the central bank`s board chairman,
Elman Rustamov, has said.
We recall that the National Bank of Azerbaijan (NBA) had announced when the global financial crisis hit economies worldwide in mid-2008 that local banks owed foreign financial institutions funds to the tune of some $2.5bn.
Rustamov pledged that Azerbaijani banks would repay the outstanding $1.5bn this year. Funds amounting to $100 million were reimbursed in early January.
Further, the central banker noted that the fast-growing South Caucasus republic`s banking sector faced two major challenges last year, with both of them caused by outside impact.
First, cash markets virtually ceased to exist in financial markets worldwide. In other words, there was enough supply in the money market in the first half-year and Azerbaijani banks considerably capitalized on that, however, this market unexpectedly ground to a halt.
The other development was of psychological nature. The troubles that hit financial giants around the world, in particular, their bankruptcies and nationalization by governments, had adversely affected Azerbaijan`s finance sector, notably, deposit holders, creditors and owners of banks.
Rustamov emphasized that a number of pre-emptive steps had been taken to alleviate the impact of the global crunch and the requirements put forth to local banks toughened. At the same time, tangible assistance was provided to the national banking sector. Throughout the year, the NBA`s monetary policy had been softened and interest rates on bank loans lowered several times. As a result of the reduction in hedge funds, banks acquired additional liquid assets worth $500 million.
Rustamov added that in the conditions of constraints with sources of funding, there is a need for additional capitalization on account of domestic sources and extra assistance to the banking sector.
We recall that the National Bank of Azerbaijan (NBA) had announced when the global financial crisis hit economies worldwide in mid-2008 that local banks owed foreign financial institutions funds to the tune of some $2.5bn.
Rustamov pledged that Azerbaijani banks would repay the outstanding $1.5bn this year. Funds amounting to $100 million were reimbursed in early January.
Further, the central banker noted that the fast-growing South Caucasus republic`s banking sector faced two major challenges last year, with both of them caused by outside impact.
First, cash markets virtually ceased to exist in financial markets worldwide. In other words, there was enough supply in the money market in the first half-year and Azerbaijani banks considerably capitalized on that, however, this market unexpectedly ground to a halt.
The other development was of psychological nature. The troubles that hit financial giants around the world, in particular, their bankruptcies and nationalization by governments, had adversely affected Azerbaijan`s finance sector, notably, deposit holders, creditors and owners of banks.
Rustamov emphasized that a number of pre-emptive steps had been taken to alleviate the impact of the global crunch and the requirements put forth to local banks toughened. At the same time, tangible assistance was provided to the national banking sector. Throughout the year, the NBA`s monetary policy had been softened and interest rates on bank loans lowered several times. As a result of the reduction in hedge funds, banks acquired additional liquid assets worth $500 million.
Rustamov added that in the conditions of constraints with sources of funding, there is a need for additional capitalization on account of domestic sources and extra assistance to the banking sector.
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