Moody's prepared report on currency risks and dollarization in CIS countries

Baku. 25 March. REPORT.AZ/ “We believe that banks in Ukraine, Azerbaijan, Tajikistan and Belarus are most exposed to foreign exchange risks given trends in their local currencies and prevailing high dollarization and/or currency mismatches in their banking systems”.

Report informs, it is said in report prepared by Moody's international rating agency on currency risks and dollarization in CIS countries.

Agency believes, foreign exchange risks are lowest for banks in Uzbekistan. “Ukraine's currency saw the sharpest devaluation since 2014. We believe that banks in Ukraine, Azerbaijan, Tajikistan and Belarus are most exposed to foreign exchange risks. In Uzbekistan, despite the currency pressures, banks made a profit".

Low oil prices precipitated economic downturns across the CIS since 2014, prompting changes in exchange rate policies in the region that resulted in local currency devaluations.

“Moody’s” believes, Azerbaijani manat dependent on oil prices: “Russian ruble and Kazakh tenge have turned a corner, appreciating marginally against the dollar in 2016 on the back of the recovery in oil prices. Azerbaijani manat continued to weaken amid heightened demand for foreign-currency on the market and low confidence in the country's economic stability.Given that these three oil-producing countries have adopted a free-floating currency regime, their currency outlooks will remain heavily dependent on oil prices, which are currently stable.At the same time, the situation in Azerbaijan will also depend on the efficiency of implemented government policies to ensure the economic stability.