By Rashid Shirinov
The role of credit in the economy of every country is very significant, and this manifested both at the macro level and at the level of individual economic entities. Lending to the economy is a set of different activities undertaken by the state through its monetary system.
In Azerbaijan, a revival in lending to the economy is expected in the banking sector by the end of 2017 and in 2018. President of the Azerbaijan Banks Association (ABA) Zakir Nuriyev told reporters on October 17.
He noted that the revival of the credit market will compensate the current reduction in interest income of banks, which is caused by the decline in lending.
The data by the Azerbaijani Central Bank says that as of early September 2017, credit organizations of the country issued loans of $7.33 billion, which is by 26.5 percent less than the figure of the same period in 2016.
Speaking about the decrease in interest income, Nuriyev noted that currently this situation does not cause any special difficulties for banks.
“Currently, interest rates on deposits in foreign currency have sharply decreased, today we also observe reduction of interest rates on manat deposits. Loans in foreign and national currencies have also become cheaper,” he said.
Thus, Nuriyev added, banks could compensate the decline in the share of income from lending in the structure of interest income by lowering their interest expenses.
He also said that at present, banks have the cash liquidity of about $3.08 billion and investments in securities of nearly $592 million manats.
Rashid Shirinov is AzerNews’ staff journalist, follow him on Twitter: @RashidShirinov
Follow us on Twitter @AzerNewsAz