Azernews.Az

By Trend

Extension of the “Law on Full Deposit Insurance” in Azerbaijan will make US dollar loans even cheaper, Chairman of the Azerbaijan Banks Association (ABA) Zakir Nuriyev told reporters in Baku, Trend reports Feb. 13.

Nuriyev noted that a new bill on the extension of full deposit insurance for one more year has already been submitted to the country’s parliament. It will reduce the rates on US dollar deposits, and this will lead to lower rates on US dollar loans, he said.

Explaining the reason for the decline in interest rates on US dollar deposits, he noted that banks don’t feel the need for foreign currency.

“Banks raise interest rates on deposits, making them more attractive when they need additional funds,” he said. “However today, only those who make profits in foreign currency may receive loans in US dollars. Accordingly, now banks don’t feel the need for US dollars, therefore, it is wrong to accept deposits at high rates.”

He also commented on the current situation in Azerbaijan’s banking sector. He noted that banks in 2018 were able to increase lending, mainly due to lending to the business, adding that the assets of banks also grew.

“The main task facing banks in 2019 is to preserve these trends and ensure their further growth,” he said. “We have all the necessary opportunities for this.”

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