16 April 2009
BBC Monitoring Service, Turan news agency

The Central Bank of Azerbaijan (CBA) has launched a practice of weekly control of the balance sheets of banks in order to promptly react to any problems they may have.

"Ensuring stability of the bank system is one of the top priority tasks for us in the environment of the global crisis. Whereas the majority of regulators analyze bank balance sheets once a month, we do it on a weekly basis," Xaqani Abdullayev, CBA's chief director, told Turan. He said that the regulator monitors the current and mid-term liquidity of the banks.

"In 90 per cent of cases the banks are able to pay their debts to foreign creditors on their own. We help them when necessary," Abdullayev said.

"The Central Bank does actively help to raise the market's liquidity. In March alone CBA carried out an intervention worth several hundreds of thousands of manats on the currency market," an expert of a large commercial bank said. Starting in September 2008, CBA made a series of decisions that, according to the expert's estimates, added 900m dollars of liquidity to the bank system.

However, the influence of monetary instruments on the market has been effectively exhausted. The discount rate has been lowered to 3 per cent and the norm of obligatory reserves for deposits is down to 0.5 per cent.

Nevertheless, Azerbaijan does have enough financial resources to support macroeconomic stability, Xaqani Abdullayev said. He believes that as opposed to many other oil-producing countries, Azerbaijan will maintain the proficit of current operations on its balance of payments even if the price of oil drops to 40-45 dollars per barrel. "Furthermore, the government is currently discussing anticrisis measures, including those to support the bank system" Abdullayev added.