Azerbaijan's banking sector liquidity surplus reaches 6.2bn manats
The Central Bank reports that the structural liquidity surplus in Azerbaijan's banking sector hit 6.2 billion manats by the end of September, 2.2 times higher than in December last year.
According to the Central Bank's October 29 press release on its interest rate decision, the structural liquidity surplus measures the difference between the bank's obligations to lenders and the funds it provides them, calculated excluding mandatory reserve requirements. The required reserve ratio stands at 5% for manat-denominated funds and 6% for foreign currency funds, though it can rise to as much as 25% depending on the share of legal entity and related-party deposits. Any surplus funds remaining after reserve requirements are met are temporarily absorbed by the Central Bank through seven-day deposit auctions and short-term notes, which help prevent sharp declines in interbank rates. By the end of September, seven-day deposit operations accounted for 66.4% of the open market operations portfolio aimed at absorbing excess liquidity. The AZIR benchmark rate for unsecured short-term interbank transactions averaged 6.31% in August, 5.93% in September, and 5.99% for the part of October reported.
More news
Taleh Kazimov: Business Lending Requirements Are Not Strict
Central Bank of Azerbaijan Governor Taleh Kazimov said prudential requirements for business lending are softer than international practice, with tightening mainly applying to consumer loans.
Central Bank Head: Credit Demand Must Rise to Boost Lending
Azerbaijan Central Bank Governor Taleh Kazimov said banks have 4.6 billion manats in free funds available for lending, but increased credit demand is needed to expand lending.
Central Bank of Azerbaijan keeps key interest rate at 6.5%
On October 29, the Central Bank of Azerbaijan announced it would leave its benchmark interest rate unchanged at 6.5%, with the rate corridor's upper limit at 7.5% and lower limit at 5%.