16:58 - 13.04.2020

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April 13, Fineko/abc.az. Despite the measures aimed at supporting the economy and small and medium-sized businesses, problem loans and guarantee fees are expected to increase much.

ABC.AZ reports that such theses were noted in the outlook of international rating agency Moody's on the banking system of Azerbaijan amid the coronavirus pandemic (COVID-19) and declined oil price. The Agency points out that the main cause of that is that companies and people encountered the suddenly deteriorated economic situation.

The rating agency assumes that two-thirds of loans in the country's banking sector at the end of 2019 were exposed to risks associated with the coronavirus pandemic. In addition, banks' net interest income will decrease as financial expenditures increase to prevent the influx of savings, and this may start with the mass conversion of their local currency deposits into foreign currency. Moody's also stressed that the total reserves collected by the State Oil Fund (SOFAZ) at the end of 2019 amounted to about 90% of GDP, and the State has a good financial position for support of the economy and banking system.