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Azerbaijan weighs up liquidity support to banking sector

25 November 2008 17:11 (UTC +04:00)

He noted that banks keep in hand necessary liquidity, taking into account the schedule of payments.
According to him, this process is also applicable to the obligations to depositors and currently the volume of liquidity in banks is equal to the amount of deposits.
Rustamov added that the banking sector will need some support for recovery in lending and NBA is conducting consultations with the Government in this regard.
He also noted that Azerbaijan is one of the countries with the highest liquidity.
â€œFor example, Azerbaijanâ€™s assets position is approximately $11 billion and this figure exceeds the total external debt by 2.3 times. In this case, NBA is able to ensure the current liquidity in the economy, the real sector and banking sector. The mechanism and methods of this process is subject to discussion in the consultations with the government. The State has liquidity and it will be logical to provide it. Currently, activeness in lending has declined. But, despite the growth in the volume of loans, the growth rate decreases, and we believe that it is necessary to raise the level of lending. The main aim is to meet the demand of the economy for cash,â€ he added.
According to him, it is slated to continue softening monetary policy at the end of this and early next year.