Despite that as a result of the Russian-Ukrainian conflict banks faced certain obstacles in conducting transactions with correspondent accounts, the impact of this conflict on the operations of Azerbaijani banks with correspondent accounts was limited, according to the report of the Central Bank of Azerbaijan (CBA) on financial stability, Report informs.
Rising food prices and geopolitical pressures in the supply chain continue to drive up global inflation, the report notes: “Rising global food prices amplify the transmission of high inflation to domestic prices through imports. The current geopolitical tensions have a positive effect on Azerbaijan’s balance of payments as an oil and gas exporter country. Rising energy prices and the potential for growth in gas exports to Europe can increase exports and fiscal revenues in the medium term.”
The CBA emphasizes that since February 2022, the conflict between Russia and Ukraine has been affecting the global financial system through various channels: “The impact on the banking system of our country of sanctions imposed in connection with the conflict has so far been limited. In general, the potential impact of the processes caused regional geopolitical tensions due to this conflict, the stability of the financial system can be grouped into five areas: disruption of foreign trade relations, rising global inflation, rising prices for world energy resources, difficulties in banking operations and the risks to which banking assets are exposed.”