Azerbaijani Economy 8 april — 15:39

Who and why was withdrawing 1.1 billion manats from country annually? (Statement of Azerbaijan's Central Bank)

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BY INFORMATION SECTION

The Central Bank of Azerbaijan, referring to the report of the Accounts Chamber on its activities for 2020, made a special statement to clarify the information on the illegal withdrawal of foreign currency from the country through banks and the comments of experts that appeared in this regard.

It is reported that the relevant report of the Accounts Chamber covers the results of 2019, not 2020, and these facts reflect shortcomings in the field of customs administration as part of the checks carried out at the General Customs Directorate for Air Transport.

The statement of the Central Bank says that during the audited period, commercial banks operating in the Republic of Azerbaijan carried out the withdrawal of cash foreign exchange in the equivalent of about 1.1 billion manats from the country in an official manner and in accordance with the requirements of the legislation. These transactions are intended to be deposited into correspondent accounts with foreign banks in accordance with normal banking practice.

More than 90% of cash foreign currency exported by banks from the country is carried out in euros. Due to the massive withdrawal from circulation and transfer to commercial banks in accordance with the decision of the European Central Bank of 500 euro banknotes, banks exported these notes to be credited to correspondent accounts in foreign banks. Another part of the withdrawn funds is intended for use in settlements in foreign banks, as well as for placement on deposits with non-resident banks in order to generate income.

The Central Bank once again notes that in all cases these funds consisted precisely of the funds of the banks themselves, and not of any clients.

The financial regulator states that the import and export of foreign currency in cash by banks are official banking operations and are regulated by the existing business processes in banks in accordance with regulatory documents and are strictly controlled by the currency control authorities.

These operations were reflected and accounted for both in the official reports of the banks themselves, and in the reports submitted to the Central Bank, as well as in the balance of payments report.

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