Azerbaijani banks reduce interest rates on deposits

/By AzerNews/

By Aynur Karimova

The Azerbaijani banks reduced the interest rates on deposits both in national and freely convertible currencies in January-November 2014.

This was noted in a report by the Azerbaijani Central Bank (CBA) on the results of 11 months of 2014 published on January 5.

The average rate on deposits in manat for December 1, 2014 was 8.78 percent compared to 9.51 percent in December 1, 2013. The average rate on deposits in foreign currency amounted to 9.37 percent versus 9.72 percent in early December 2013.

As of December 1, the average interest rate on deposits of individuals in manat made up 9.45 percent, while on December 1, 2013, it was 9.46 percent. The average rate on deposits from individual customers in foreign currencies amounted to 10.02 percent versus 10.30 percent in early December 2013.

The report also said that the expanded monetary base in Azerbaijan totalled 11,601.1 million manats as of December 1.

In annual terms, the monetary base in Azerbaijan grew by 6.5 percent. For comparison, in late November 2013, this figure stood at 10,895.6 million manats.

CBA noted as of December 1, the monetary base in manat amounted to 11,519.7 million manats versus 10,787.7 million manats on December 1, 2013.

In the reported period, the volume of money in circulation amounted to 10,955.7 million manats, while on December 1, 2013 this figure stood at 10,372.8 million manats.

The report noted that money supply rate (cash in circulation (outside banks) and remainders in the domestic currency on accounts of non-financial organizations, financial (excluding credit) organizations and physical entities) increased by 15.2 percent in January-November 2014 compared to the same period of 2013.

The money supply rate amounted to 17.525 billion manats as of November 1, 2014 compared to 15.214 billion manats as of December 1, 2013.

The amount of cash money supply increased by 4.8 percent during a year and amounted to 10.318 billion manats compared to 9.849 billion manats as of early December 2013.

As of January-November 2014, Broad Money Supply totalled 21.689 billion manats or 18.6 percent more compared to January-November 2013 (18.289 billion manats).

The transaction money increased by 6.7 percent during a year reaching 12.775 billion manats compared to 11.968 billion manats as of November 2013.

CBA also noted that the Azerbaijani banks increased the consumer lending volume by 24.7 percent in January-November 2014 compared to the same period of 2013.

The share of consumer loans in a total volume of the banks’ loan investments amounted to 41.5 percent, or 7.528 billion manats. For comparison their share accounted for 39.6 percent, and the amount of issued loans – 6.035 billion manats in January-November 2013.

The trade and services ranked second in the share of the total loan portfolio of banks, and the construction and real estate sector ranked the third.

Around 11.4 percent of the total volume of lending to the real sector of Azerbaijan was directed to the industry and production.

The banks also increased lending to this sector in connection with the announcement of 2014 as the Year of Industry. For comparison in January-November 2013, the share of lending to the industrial sector accounted for 9.6 percent of a total volume of funds transferred by the banks into the country's economy.

The share of transport and communication hit 3.1 percent, agriculture and processing reached 4.6 percent, energy, chemistry, and natural resources - 1.2 percent.

There are 44 banks operating in Azerbaijan.

Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz