AZE.US
Bank deposits in Azerbaijani manats currently offer significantly higher returns than savings held in foreign currency.
Economist Khalid Karimli told Demokrat.az that banks are offering an average annual return of 10% to 11% on one-year manat deposits. By comparison, deposits in U.S. dollars and other foreign currencies typically yield around 2% to 2.5%.
Under Azerbaijani law, manat deposits of up to AZN 100,000, or about $58,800, are insured if the annual interest rate does not exceed 12%.
Foreign-currency deposits are also protected up to the equivalent of AZN 100,000, provided the annual return is no higher than 2.5%.
The insurance system, however, does not cover losses caused by exchange-rate changes. Depositors must assess that risk themselves.
Karimli said manat deposits may currently be the more attractive option because their returns exceed the country’s inflation rate.
He also said there is no pressing economic need for a devaluation of the manat at present and that no serious exchange-rate risks are expected through the end of the year.
AZE.US