Azernews.Az

By Aynur Jafarova

Central Bank of Azerbaijan (CBA) made huge progress in 2013 including ensuring national payment systems stability.

This was part of the statement by chairman of the CBA Elman Rustamov at a conference on the achievements of the bank in 2013.

During the conference, Rustamov noted back in 2013, CBA managed to further develop the financial intermediation, including financial infrastructure to support the process of diversification of economy. This in turn led to the successful implementation of the government's economic policy.

"Flexible tools of financial stability management were applied to manage risks and excessive liquidity in the banking sector. This issue led to the decline of average interest rates on loans," he said.

"In 2013, the volume of payments made by the national inter-banking system of large payments amounted to 114.258 billion manats. Meanwhile, operations with a total worth of 23.27 million manats were conducted through the payment clearing system of small payments. By the end of last year, the total GDP of Azerbaijan amounted to 57.7 billion manats, which is 5.8 percent more than in 2012," he said during the conference.

CBA chairman went on to say that in recent years Azerbaijan's banking system has developed rapidly and today the country has a strong banking sector.

The country's strategic currency reserves reached $50 billion and currency reserves of CBA increased by 21 percent and reached $14.2 billion, Rustamov said.

Speaking about CBA's goals for 2014, Rustamov stressed the bank should provide monetary support to the development of industry, in particular to the non-oil industry.

"Single-value (single-digit) inflation remains targeted macroeconomic indicator, and this goal will be achieved through the control of the core inflation. The task is to prepare the transition to a more flexible exchange rate of manat in the medium term," Rustamov said.

He noted CBA also aims to synchronize monetary and macroprudential policies, and to increase the depth of the banking market in 2014.

"Our priority is to expand the bank financing of the real sector," Rustamov stressed.

He said it is important to continue the integration of the public institutions into the governmental payment portal, to promote the regions e-banking services and to expand the non-cash payments.

"Today, supply exceeds the demand in the country's currency market. This is largely due to the large surplus in the payment balance. Last year CBA conducted currency sterilization at a total amount of $2.5 billion to prevent significant appreciation of rate and neutralization of negative effects on the competitiveness of the non-oil sector and was able to keep the stable exchange rate of manat to the dollar," he said.

Also, CBA has adopted a new strategy for instrumental, currency and geographic diversification of currency reserves to improve the effectiveness of management of foreign exchange reserves.