Central Bank of Azerbaijan sets 100% LCR requirement for all banks starting December 1, 2025

BAKU. April 17 (Interfax) - The liquidity coverage ratio (LCR) in Azerbaijan's systemically important banks will be 100% from June 1, 2025, while in other banks it will be 90%, the Central Bank of Azerbaijan (CBA) told Interfax.

"Starting from 2025, banks must apply new requirements regarding the liquidity coverage ratio [both in foreign currency and in aggregate]. According to the established schedule, from June 1, 2025, the LCR in systemically important banks will be 100% [as of March 1, 2025, there are five such banks], and 90% in other banks - 90%," the CBA said.

From December 1, 2025, the liquidity coverage ratio in all banks of the country must be at least 100%.

These requirements will strengthen risk management potential in the banking sector, improve liquidity position forecasting, and more effectively maintain stability, a CBA representative said.

Until the LCR for the banking system reaches 100%, the CBA will continue to apply the instant liquidity ratio.

"At the end of 2024, the instant liquidity ratio of Azerbaijan's banking sector was 52%, which is 22 percentage points above the minimum requirement. In 2024, liquid assets of the country's banks increased by 1.1 billion manat, or 8%, reaching 14.2 billion manat. Overall, liquid funds accounted for 27% of the banking sector's assets at the end of 2024, providing an adequate buffer to respond to potential liquidity shocks," the CBA said.

The CBA said that at the end of 2024, 56% of banks' liquid funds were in national currency (52% at the end of 2023), while 44% were in foreign currency. A total of 46.6% of banks' liquid funds consisted of securities.

Azerbaijan has 22 licensed banks.

The official exchange rate on April 17 is 1.7 manat/$1.