BAKU, Azerbaijan, October 1.The Central Bank of
Azerbaijan has held a presentation of the report on financial
stability for the first half of 2024, Trend reports.
Director General of the Central Bank of Azerbaijan Shahin
Mahmudzade stated that the macroeconomic situation in Azerbaijan
demonstrates positive trends.
“The global macroeconomic environment is shaped by a number of
factors, including ongoing geopolitical tensions, expectations of
interest rate cuts in Europe and the US, and a slowdown in global
growth in commodity and raw material prices. With weakening global
demand, there is an increase in inflation risks, which requires
additional attention to stability issues. Against the background of
these external challenges, the internal macroeconomic situation in
Azerbaijan demonstrates positive trends. The country's economy
continues to grow at the expense of the non-oil sector, and the
real effective exchange rate of the national currency remains
stable. Increasing employment and income of the population also
contribute to strengthening financial sustainability. The positive
balance of foreign trade and growth of strategic foreign exchange
reserves create an additional margin of safety,” he said.
According to him, the country's authorities pay special
attention to improving the welfare of citizens.
“The government and the Central Bank are taking measures to
support economic growth through budgetary and monetary policies
aimed at ensuring the sustainability of the economy,” Mahmudzade
added.
He noted that in the first half of this year, the sustainability
of Azerbaijan's financial sector was further strengthened.
“In the reporting period, the banking sector continued to
maintain its dominant role, occupying 94.6 percent of the country's
total financial sector,” Mahmudzade emphasized.
He also stated that Azerbaijan continues to improve the legal
and regulatory framework in the banking sector.
“Firstly, the rules for conducting transactions with persons
related to banks have been updated. The purpose of the changes is
to ensure safer and more transparent conditions for performing
transactions, reduce risks, and improve the stability of the
banking system. Second, changes have been made to the credit risk
management procedure. This concerns the expansion of life insurance
conditions for consumer loans, as well as strengthening control
over the risks associated with the provision of loans,” the
director general emphasized.
He noted that the third important step was the adoption of
requirements for information security in banking and non-banking
credit organizations.
“The innovations are aimed at strengthening data protection and
minimizing cybersecurity threats. Finally, a document on the
implementation of sustainable finance principles was approved. It
is aimed at integrating sustainable development strategies into
banks' corporate governance, increasing transparency in accounting
and reporting, as well as effective risk management,” he added.
Mahmudzade informed that financial sanctions totaling 135,609
manat ($79,7) were applied in Azerbaijan in the first half of the
current year.
“In the first half of the current year, 18 inspections and 47
control measures were carried out in the financial sector. As a
result of recorded violations, financial sanctions totaling 135,609
manat ($79,7) were applied. In addition, tough measures were taken
against 37 entities, which included revocation of licenses,
suspension of their validity, or imposing restrictions on their
activities,” he stressed.
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