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Sunday, November 19, 2017

IMF recommends that Azerbaijan's banks reduce consumer loan interest rates

The International Monetary Fund recommended on Monday that banks in Azerbaijan reduce interest rates on consumer loans and begin active financing in the private sector.

Raja Almarzoqi, the mission head for the IMF, said on Monday that the IMF supports measures taken to limit consumer lending in Azerbaijan, but he recommended that the impact of such measures be thoroughly researched, ABC.az reports.

"The interest rates of Azerbaijan's banks are too high, they can reach even 30 percent, as those rates are the main source of profit," Almarzoqi said, according to ABC.az. "If the interest rates are reduced the banks will look for other sources of profit, for example, they can start financing (the) private sector."

Almarzoqi said recent measures taken by the Central Bank of Azerbaijan were meant to provide financial stability, but he said stability of the system is another factor to consider.

"The measures of the Central Bank of Azerbaijan on toughening the financial control rules are intended for providing financial stability but at the same time there's necessity to increase stability of the system and improve competitiveness of interest rates margin," Almarzoqi said, according to ABC.az.

In accordance with Article IV of the agreement on the IMF's establishment, the fund performed an inspection in Azerbaijan before Monday's press conference.

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International Monetary Fund 700 19th Street, N.W., Washington, D.C. - 20431

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