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Moody's: Manat stability has had a positive impact on dollar loans

05 December 2025 19:57 (UTC +04:00)

The stability of the manat has had a positive impact on dollar loans, APA-Economics reports, citing the international rating agency Moody's.

According to Moody’s, the long-term stability of the manat has significantly improved the quality of foreign currency loans in the banking sector. The share of foreign currency loans fell from 30% in 2020 to 16% in 2024, and to 14% in September 2025.

The agency reports that non-performing loans remained at a historical low of around 3% at the end of 2024, with coverage by provisions at 112%. Strong performance in the non-oil sector supports asset quality by improving borrowers’ repayment capacity.

Moody’s notes that the main constraint for Azerbaijani banks is the high dollarization of deposits. In September 2025, foreign currency deposits accounted for 38% of total deposits (56% in 2020). Nevertheless, manat liquidity has improved due to dedollarization and government support.

According to the report, customer deposits are the main source of funding for banks and account for about 75% of liabilities in the system. With 39% of assets consisting of liquid funds, the banking sector’s resilience to external shocks is assessed as high.