S&P: Converting of savings into foreign currency may weaken external balance

12:24 - 26.10.2020


October 26, Fineko/abc.az. International rating agency S&P Global Ratings has published a forecast on the economy of Azerbaijan.

ABC.AZ reports that the Agency predicts that the liquidity of foreign currency in the banking sector may strengthen in the short term if there is conversion of Azerbaijani population’s deposits into foreign currency and acceleration of withdrawal of dollar deposits.

"In our opinion, in the short-term prospect the currency liquidity in the banking system may decrease if the conversion of residents' savings into foreign currency and the possible withdrawal of dollar deposits accelerates. This may lead to the depletion of external reserves in an attempt to meet the growing demand for foreign currency and may weaken the external balance, which we currently consider as the main strength of the rating," S&P experts say.

 

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