Regulatory AlertsRegulation on Setting Open Currency Position Limits in Banks
The Central Bank of the Republic of Azerbaijan issued Decision No. 45/1 to establish calculation methodologies, reporting standards, and capital-based limits for the open currency positions of banks and foreign bank branches operating in Azerbaijan. The regulation mandates daily electronic reporting of balance sheet and off-balance sheet claims and liabilities, applying specific credit conversion factors and excluding structural positions to determine net open currency ratios. It sets strict percentage thresholds against total regulatory capital, capping single-currency positions at 10 percent and net positions at up to 20 percent for freely convertible currencies, while imposing tighter limits on closed currencies and bank metals.
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