Azerbaijan Central Bank’s net loss reached 308.7 million manat

Azerbaijan Central Bank’s net loss reached 308.7 million manat

KPMG Azerbaijan completed the audit for Central Bank of Azerbaijan’s (CBA) 2014 performance. According to the audit report, the bank has reported a sharp increase in CBA activity losses. The report has underlined that , the net loss of the CBA over the past year reached 308.734 million manat versus net profit of 280.57 million manat for 2013. As a result, Bank’s retained profit of 31.47 million manat for 2013 replaced with outstanding (undistributed) loss of 277.26 million manat. While CBA authorized capital (10 million manat) and capital reserves (209.517 million manat) kept at the constant level, the Bank’s total capital fell from 250.99 million manat to 57.7 million manat.

However, CBA assets grew from 15.326 billion manat up 15.726 billion manat in 2014 They accounted for investments in securities, which increased from 1.1 billion manat up to 3.6 billion manat, loans to banks (increased from 3.359 billion manat up to 3.45 billion manat), and investments in trading securities which increased from 1.9 billion manat up to 2.939 billion manat. At that, CBA main obligations associated with money circulation fell from 11.03 billion manat to 10.845 billion manat.

The Central Bank of Azerbaijan’s (CBA) intervention cost was $ 1,073 billion US in April 2015. Bank’s total currency reserves declined to $ 8,397 billion US in April 2015 since it was $ 9.47 billion US previous month. Reminded here that CBA’s currency reserves were $11.004 billion US by 1 March, $12.68 billion US by 1 February $13.758 billion US by 1 January 2015. Currency reserves have been declined from $ 15,193 billion US in August 2014 to $ 8,397 billion US in April 2015.

CBA’s currency reserves have been declined by $ 6,796 billion US in last 8 months. Decrease of CBA currency reserves in April 2015 totaled $1.08 billion US (-11.4%). In 2015 their decrease totals already $5.37 billion Us (-39%). In accordance with CBA forecast, by the end of 2014 currency reserves should have reached $16 bn, but the forecast was made before the fall in world oil prices.

CESD experts have mentioned that the main reason of extraordinary declining of currency reserves in April 2015 was related to high demand for foreign currency in the first 10 days of April: “Without any justification, CBA depreciated the manat’s rate against the US dollar in the first 10 days of previous month. The manat started appreciating only in the after the 1/3 of the month. CBA uses not more psychological methods to decrease demand for foreign currencies”.

Meanwhile, CBA administratively decreases volume of national currency in the currency market. CESD’s monitoring show that many currency exchange offices faces lack of the manat volume in last couple weeks. Although demand for the national currency is not increased, but volume of the manat is administratively controlled by CBA. Central Bank targets using such administrative methods to decrease a demand for foreign currencies.

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