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Azerbaijan reports immediate liquidity level for the banking system at 70%

02 March 2009 16:15 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. The aggregate immediate liquidity rate for the Azerbaijan-based banks is 60-70%, said Elman Rustamov, the chairman of the National Bank of Azerbaijan.
The immediate liquidity of a bank reflects the risk of loss of liquidity in a single trading day and is determined highly liquid assets/bank liabilities (obligations).
Azerbaijan mandatory immediate liquidity standard is defined at 30%.
At the same time, Elman Rustamov acknowledged liquidity problems in the banking system.
E. Rustamov believes that the banks recently used mainly two sources for funding: domestic deposits and foreign borrowing.
Stable level of deposits and a sharp decline in new foreign loans forced banks to seek new sources of for funding.
This source can be the centralized credit market after the National Bank cut refinancing rate to 3%, creating an enabling environment.
In this regard, the National Bank expects a more active use of this source by the commercial banks.