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Short macroeconomic review and activity of banking system of the Republic of Tajikistan for 2019
The press conference following the results of activity of banking system for 2019 took place on February 5, 2020 in the National Bank of Tajikistan according to the Plan of arrangement and conducting press conferences in the ministries, departments, institutions and agencies, executive bodies of government of AMBR, regions, Dushanbe city, towns and districts of republican subordination on 2019 activity summarizing on the base of the order of President of Republic Tajikistan dd.from September 15, 2011, АP - 1729.
In the beginning of the press conference the Chairman of National Bank of Tajikistan Jamshed Nurmahmadzoda has noted that the National Bank of Tajikistan has directed the monetary and exchange rate policy on preservation of stable price level, regulation of money supply in the economy, maintenance of financial stability and promotion of stable growth of economy.
Gross Domestic Product (GDP)
The Gross Domestic Product (GDP) of the country in 2019 has made TJS 77,4 billion and its real growth made 7,5 % that in comparison with last year is more by 0,2 percentage points. For this period the economy growth was promoted by increase in production of industrial output of 13,6 %, retail trade turnover of 9,6 %, agricultural products of 7,1 % and paid services of 2,9 %.
As a result of implementing fruitful cooperation in 2019 the banking system of the country involves loans and direct foreign investments for USD 114,1 million that in comparison with last year is more on 32,0 %.
Inflation
In 2019 despite the influence of seasonal, administrative and external factors as a result of effective implementing anti-inflationary policies through application of monetary tools and stabilization of situation in the internal exchange market the inflation has developed within projected indicator (7,0 % +/-2 p.p.) and has made 8,0 %
The inflation for this period basically has been caused by a rise in prices for consumer goods such as flour of the first grade, beef, mutton, rice and vegetables (including potato and onions).
Monetary policy
With the aim of decreasing the inflationary and exchange rate pressure, efficient control of banks liquidity, preservation of stability tendency of money supply, development of financial system and primary securities market it was held 141 auctions of securities of the National Bank of Tajikistan for the amount of TJS 16,2 billion for the reporting year.
Also with a view of regulation of money supply in circulation it was involved «overnight» deposits for TJS 123,2 billion that in comparison with last year it is more in 3,1 times.
The National Bank of Tajikistan taking into account the projection of situation of external and internal economy and relative decreasing influence of potential risks has gradually lowered the refinancing rate from 14,75% to 12,25& per annum (2,5 percentage points).
National currency exchange rate
The change of national currency exchange rate in 2019 as a whole is estimated stably and its official exchange rate (average rate of purchasing and sale of the USD in the interbank and intrabank markets) has decreased only by 2,7 % that in comparison with last year is less on 4,2 %. It is necessary to note that the given decrease has occurred basically as a result of carrying out one- time adjustment of the official exchange rate by 2,76 % on 20.08.2019.
In 2019 the sale rate of US dollar in the informal market has decreased by 0,1 % and the difference between this exchange rate and official rate of cash US dollar on December 31, 2019 made 1,1 % (in the similar period of 2018 the given difference made 3,9 %).
For the reporting period with the aim of the efficient control and increasing international reserves, the total foreign reserves have reached 5,3 months of import (import indicator is given according to the Statistics Agency data).
Banking system
There are 75 credit and financial institutions operating in the territory of the republic as of December 31, 2019 including 16 banks, 1 Islamic bank, 22 micro-credit deposit institutions, 6 micto-credting organizations and 30 micro-lending funds and also 328 branches and 1500 banking services centers of credit financial institutions.
The total assets of credit financial institutions as of December 31, 2019 have made TJS 22,0 billion having increased in comparison with the similar date of last year by 3,7 %. The balance capital has increased by 5,3 % and reached TJS 6,2 billion.
Deposits
As of December 31, 2019 the total amount of balance of deposits has made TJS 9,7 billion that in comparison with the similar period of 2018 is more for TJS 18,4 million. The volume of balance of deposits in national currency has increased by 8,5 % and it has decreased by 7,8 % in foreign currency. Their share in total balance of deposits in national currency has made 53,1 %, and 46,9% in foreign currency deposits (in 2018 - 49,9 % and 51,0 % accordingly). The given indicator testifies to gradual decrease of dollarization of economy and increasing trust of population to national currency.
Loans
The total amount of issued loans of credit institutions in 2019 has made TJS 9,6 billion that in comparison with 2018 is more on 25,5 % or TJS 1942,5 million. The volume of total balance of credit portfolio has reached TJS 9,8 billion having increased by 12,0 % or TJS 1 048,1 million.
46,1 % of total amount of issued loans for this period or TJS 4 405,7 million falls on industrial entrepreneurship that in comparison with the similar period of last year is more for 37,0 % or for TJS 1 188,5 million. In cut of branches: 25,7% falls on consumption, 21,6% on the industry, 14,0% on foreign trade, 13,6% - agriculture, 13,0% - services, 7,9 % - construction and 4,2% on other branches.
Attraction of women to banking system
In 2019 the number of women employed in banking system of the country was 6 063 persons (or 35,2 %) that in comparison with the similar period of last year is more for 599 persons. 3 124 persons of this staff are women working as front office staff and 641 or 21,2 % as supervising staff.
Payment system
As of December 31, 2019 the quantity of ATMs and electronic terminals in the republic has made 878 and 5 348 units accordingly and in comparison with similar date of last year the quantity of ATMs has increased by 200 units and quantity of electronic terminals on 849 units.
The total of bank accounts opened for clients in the credit institutions has increased in comparison with similar date of last year by 15,4 % having made 4 057 782 units that testifies to improvement of coverage of the population by banking services.
The total quantity of payment cards issued by local banks for the reporting date has made 2 483,9 thousand units that in comparison with 2018 is more on 36,7 %. The quantity of payment cards holders has increased by 35,1 % having made 2 420,6 thousand persons.
Applications of citizens
For the purpose of protection of banking system consumers’ rights, the receiving and consideration of applications and complaints of citizens by the National Bank of Tajikistan is carried out in the written and oral forms, by means of phone calls and e-mail. As a whole 2 906 requests and complaints have been accepted for consideration, including 79 units through the Executive Office of President of the Republic Tajikistan, 1 644 units by means of hotline phone, 809 applications at reception of citizens and 374 applications directly by the National Bank of Tajikistan for settlement of which necessary measures have been taken according to the established order and limits of existing powers.
Insurance sector
As of December 31, 2019 the quantity of insurance institutions has made 19 units, 2 of them are state insurance institutions, 16 – non-state insurance institutions. Also one Center for support of mutual insurance also functions in the insurance market of the country.
The amount of compensation paid to clients of insurance institutions in 2018 have made TJS 14 877,58 thousand. Also liabilities of insurance institutions for the reporting period have made TJS 96 302 386,62 thousand that in comparison with 2018 is less by 6,7 %.
International cooperation
With the purpose of development of banking system of the country, the National Bank of Tajikistan has expanded the sphere of cooperation with the International Monetary Fund (IMF), the World Bank, European Bank of Reconstruction and Development, Islamic Bank of Development, State Bank of Development of China, Euroasian Bank of Development, international funds, central (national) banks and banking institutions of countries from the far and near abroad.
As a result of implementing fruitful cooperation in 2019 the banking system of the country involves loans and direct foreign investments for USD 114,1 million that in comparison with last year is more for 32,0 %.
Then during press conference the representatives of local and foreign mass media have received precise and detailed answers by Chairman of the National Bank of Tajikistan and First Deputy Chairman of the National Bank of Tajikistan for their questions concerning a role of banking system in realization of the fourth strategic target of the country - industrialization, carrying out reforms in banking system, macroeconomic situation, monetary and exchange rate policy, inflation rate, attraction of the foreign capital to banking system and to economy, management of international reserves, credit policy, in particular mortgage crediting, clearing settlements in the economy, level of trust of population to banking system, financial literacy of the population, insurance sector, the IMF program, securities market, activity of National Processing Center of Remittances without opening of accounts, refinancing rate, National system of AML/CTF and also other issues on banking system.
Press Division National Bank of Tajikistan