Interest rates on foreign currency deposits fell to new lowest in Azerbaijan

Interest rates on foreign currency deposits fell to new lowest in Azerbaijan
# 09 October 2008 13:37 (UTC +04:00)
Baku. Vahab Rzayev - APA-Economics. Interest rates on foreign currency deposits in the Azerbaijan banks have dropped to a minimum over the past 2 years, said the National Bank of Azerbaijan.
As of September 1, 2008, average interest rate on deposits in national currency (manat) reached 12.02% and the rate on deposits in foreign currencies made 7.84% per annum, compared to 11.28% and 12.65% respectively a year earlier.
Also, as compared to early this year, the rates fell 0.66% and 4.38% correspondingly.
The highest interest rate on deposits in manat (12.08%) was recorded in July this year while the rate on deposits in foreign currencies fell to a minimum in September.
Interestingly, until February 2008, interest rates on foreign currency deposits stood above the rate on national currency deposits.
However, lower rates on deposits in the US dollar (because deposits in dollar account for most of the foreign currency deposits) don’t reflect the fluctuation of the national currency.
By rule, this would happen against the backdrop of the US dollar appreciation.
However, there is a reverse process in Azerbaijan: the dollar fell 4.4$ from the beginning of this year while interest rates on foreign currency deposits declined instead of increasing.

Average annual rates on deposits:

01.09.2008

01.09.2007

Average rate

Legal Entities

Individuals

Average rate

Legal Entities

Individuals

In manat

12,02

10,49

12,66

11,28

9,63

12,41

In foreign currency (US dollar)

7,84

5,15

12,50

12,65

9,90

12,77

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