BAKU, Azerbaijan, August 4. As of July 1, Azerbaijan's banks held net foreign assets of 31.217 billion manats ($18.36 billion).
According to calculations by Trend based on data from the Central Bank of Azerbaijan (CBA), net foreign assets increased by 1.128 billion manats ($663.5 million), or 3.7%, from the previous month and by 5.094 billion manats ($3.00 billion), or 19.5%, from a year earlier.
As of the reporting date, banks' net domestic assets totaled 21.707 billion manats ($12.77 billion), up 295.6 million manats ($173.9 million), or 1.4%, month over month, but down 637.4 million manats ($374.9 million), or 2.8%, from July 1 last year.
As a result, Azerbaijan's net foreign assets exceeded net domestic assets by 9.509 billion manats ($5.59 billion), or about 1.4 times, as of July 1.
During the reporting period, 22 banks operated in Azerbaijan with combined assets of 60.940 billion manats ($35.85 billion), total liabilities of 53.295 billion manats ($31.35 billion) and total equity of 7.646 billion manats ($4.50 billion).
Against the backdrop of rising foreign assets in the banking sector, CBA officials said the country's banking system remains financially resilient and that there is no need to change the current course of monetary policy.
CBA Governor Taleh Kazimov told a news conference following the announcement of the central bank's interest rate corridor parameters that there is currently no reason for the regulator to switch to a "Plan B."
"The macroeconomic environment and current regulatory indicators provide sufficient grounds to continue our existing policy course. That is why we are continuing to implement the strategy we have chosen," Kazimov said.
He added that all central banks prepare contingency plans for different scenarios and that one of the key elements of successful monetary policy is the ability to respond quickly to changing economic conditions.
"We believe the current monetary policy will provide an adequate response to potential challenges the economy may face over the medium and long term," Kazimov said.
The CBA governor also said the banking sector has sufficient financial resources to expand lending. According to Kazimov, after mandatory reserves are deducted, the banking system has about 6 billion manats ($3.53 billion) in excess liquidity, of which 4.6 billion manats ($2.71 billion) could be used for lending or capitalization.
"The banking sector fully complies with all of our liquidity requirements. Even after taking those requirements into account, our calculations show the sector still has 4.6 billion manats ($2.71 billion) in available funds. Banks can direct these resources toward both capitalization and lending," Kazimov said.
