11:59 - 8.07.2025

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July 8, Fineko/abc.az. The amendments made by the Central Bank of Azerbaijan (CBA) to the Rules of Liquidity Risk Management in Banks will come into force on August 1.

ABC.AZ reports, referring to the CBA, that the main purpose of the changes is to more effectively manage liquidity risks in banks by restructuring quantitative and qualitative parameters and further strengthening their liquid positions, as well as preserving the banking sector's ability to finance the real economy.

The new requirements provide for the application of the liquidity coverage ratio (LCR), used to assess banks' liquidity position, both in aggregate and in national currency. Starting from August 1, systemically important banks must gradually increase the LCR ratio in national currency to 100% by July 1, 2027, starting from 50%, and all other banks — by December 1, 2027, starting from 40%. In parallel with the changes, the range of assets that banks can classify as high-quality liquid assets was expanded (banking metals, securities of state-guaranteed financial institutions, overnight deposits, short-term funds placed with the Central Bank are allowed to be classified as high-quality liquid assets).

The changes to the Rules will serve to build more flexible mechanisms for measuring and managing liquidity risks in general, as well as better forecasting the distribution of liquid funds in banks between national and foreign currencies, and more stable formation of banks' liquid position in the national currency.