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CBA publicizes directions of monetary and financial stability policy for 2012

30 December 2011 08:34 (UTC +04:00)

According to declaration, foreign economic position of Azerbaijan is favorable, strategic currency reserves can absolutely neutralize potential macro economic risks: â€œCurrently, economic growth takes the source from non-oil sector. The inflation is controlled optimally and is at the single-digit level. The important anchor of macro-financial stability â€“ exchange rate of manat is stabile. The banking sector shows a high financial stability. While credit rating of most world countires is reduced, azerbaijanâ€™s credit rating risesâ€.

This year, growth in export prices affected the increase in financial flows from abroad. During the first 9 months, exports of goods increased by 34% to $26.8 billion compared to last year, the export of services - by 26.4% to $ 1.9 billion. As a result, the current account surplus increased by 20.4% over the same period in 2010 and amounted to $14.4 billion. This, in turn, covered deficit of capital account and increased the reserve assets up to $10.4 billion.
As of December 1, reached $42 bln and exceeded 65% of GDP. The strategic currency reserves is enough for financing of goods and services for three years and exceed the external public debt of the country by almost 10 times. Foreign exchange reserves of the Central Bank increased by more than 60% this year and reached $ 10.5 billion.

Under the declaration, Central Bank directed its policy to realization of targets such as keeping of inflation at single-digit level, stability of exchange rate o manta, strengthening of financial stability, in 2011. During the year, the bank has conducted its policy in the condition of extension of offer sources at currency market. CB has sterilized more than $4 bln to neutralize the negative impacts on competitiveness of non-oil sector and prevent the strengthening of rate significantly. Consequently, the exchange rate of manta against dollar was strengthened by 1.5%.

Declaration says share of real sector and populationâ€™s overdue credits in banking system made 6.5%, and half of this is covered by inventories established by banks. At present, liquidity ratio is high and liquid assets made 14.3% of total assets. Banking sector has capital level to cover the risks and support the assets. So that indicator of adequacy makes 15.8%. External debts decreased by twice. Stress-tests indicate that, banking sector has potential to absorb the risks and save the durability.