No increase is expected on credit interests


June 23, Fineko/ The increasing effect of the norms of mandatory reserves on credit interests is not expected.

ABC.AZ reports that Central Bank’s previous decisions regarding the parameters of the interest rate corridor continue to strengthen the softening effect of monetary conditions on inflation.

Under conditions of increased inflationary pressure in the banking sector, more active use of mandatory reserve norms is envisaged in order to further sterilize the existing excess liquidity.

"According to our estimates, the increase in mandatory reserves to 4% for deposits in national currency and up to 5% for deposits in foreign currency has positive impact on the value of liabilities in the banking sector by a total of 0.044%. This means that under conditions of excessive liquidity, an increase in the norms of mandatory reserves will not have an increasing effect on credit interests."