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        Central Bank of Azerbaijan
        in 20 years

        Award of the employees of the
        Central Bank of the Republic
        of Azerbaijan

        Governor's Speech

        Commemorative Coin

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Dear guests!
Dear colleagues!
Dear friends!

It is my great pleasure to greet you at the ceremony dedicated to the 20 year anniversary of the Central Bank of the Republic of Azerbaijan. We are proud of celebrating the second decade of the Central Bank – the crucial state attribute of our independent Azerbaijan.

I congratulate our staff, veterans and the whole banking society on the occasion of this significant day. I am sure that we shall make further progress, and strive for ongoing development and prosperity for the sake of our country.

President of the Republic of Azerbaijan His Excellency Ilham Aliyev has rewarded me and a great number of the Central Bank employees with high state awards on this occasion. I express my appreciation and gratitute to our Honorable President on behalf of our staff.

The jubilee of the Central Bank coincides with the 20 year of independent statehood building. While a 20 year independence is a short period of time, it will stick to memories as a complicated, however an honorable and glorious page of our national history.

Particularly the last 18 years of our independence went down to history as the recognition of Azerbaijan on the world map as a modern and strong country and a decisive page in its development. The author of this bright period is the architect of the modern Azerbaijan statehood, the national leader Heydar Aliyev.

The great person Heydar Aliyev led the country in the toughest period of the independence; this leadership was the key turning point for the development of the Azerbaijani statehood. Today modern Azerbaijan is benefiting from grandiose achievements and results endowed by the Heydar Aliyev heritage. These achievements also lay a robust foundation for prosperity of our future generations.

Honorable President, Mr. Ilham Aliyev, being a worthy successor of Heydar Aliyev, is adding vivid pages to the contemporary history and brilliant future of our country. Today we are witnessing a huge development and revival in social, economic and cultural life of our country. Azerbaijan, though young, is firmly gaining positions on the geopolitical and geoeconomic map of the world.

Our society and life are being modernized on an ongoing basis, our country is bravely heading to the ranks of advanced countries. The State of Azerbaijan and its economy are being recognized not only regionally, but also globally. Just in 8 years the scale of the economy jumped by 3 times and the poverty declined by 5 times – the countries with such achievements are very rare n the world history.

As a result of the successful economic strategy of Honorable President Ilham Aliyev our country has left over 100 countries behind having advanced by about 40 steps over the past 10 years according to the per capita GDP.

The Central Bank of Azerbaijan, being a strategic public institution, has been actively contributing to strengthening and development of the country from the very birth up to now. The achievements on banking reforms and macroeconomic stability enabled the Central Bank to withstand very hard, however honorable historical tests.

The first years of the Central Bank activity coincided with the political and economic crisis in the country, military invasion and civil confrontation. The first years of the economic transformation were accompanied by a deep decay. 60 per cent of the economic potentional of the country was lost. Hyperinflation and poverty were on their highs. Foreign exchange reserves of the country hardly existed. The financial sector was paralyzed. The national currency depreciated against the USD by 18 times within the two years of its existence.

With the national leader Heydar Aliyev’s coming to power, the situation radically changed. As a result of his far-sighted politico-economical course Azerbaijan left the chaos behind and stepped to the period of stability and ongoing development. Grounds of the market economy were created in a short period of time. The programs on macroeconomic stabilization and structural reforms were successfully implemented.

The Central Bank was an active player in all these achievements. A joint effective acitivity of the Central Bank with other economic bodies over the past years yielded sustainable macroeconomic stability in the country. It is not a mere coincidence that, Azerbaijan is among the top 20 countries according to macroeconomic stability. Over the past 10 years average annual inflation fell below 8 per cent. The low level of inflation significantly contributed to the poverty reduction.

Manat has transformed to the most sustainable and reliable currency in the region and now it is being used as a regional currency in the transborder trade. The exchange rate of manat against USD changed on average annual only 1.6 percent over the past 10 years. Successful denomination led to the economic significance of manat as a currency. Today the Azerbaijani manat is the new generation currency with the latest protective elements that meets aesthetic requirements.

The banking sector has been successfully transformed,, radically restructured and privatization programs implemented. The financial infrastructure, including the state-of-art e-payment systems, and a postal banking system, that meets the advanced international standards, has been created. Microfinancial institutions, the mortgage mechanism have been developed. Over 8.000 families bettered their housing conditions through mortgage lending. The banking system performance is aided by strategic institutions – card processing centers, the Deposits Insurance Fund and the Credit Registry.

Currently we have a liberal, internationally highly rated banking sector rendering a wide range and the most up-to-date financial services. The population greatly confides in the banking system. Deposits of the population with banks have climbed by 35 times over the past 10 years. Banks hugely contribute to the doversification of the economy. Credit investments of banks to the economy have jumped by 25 times over the past 10 years. The banking legislation has been brought in line with the advanced western standards and effective banking supervisionhas been formed.

A joint tasks-oriented performance of the Central Bank with the Government of Azerbaijan took the country economy successfully through 2 more global crises upon the transformation crisis. The macroeconomic stability and banking system sustained both during the Asian crisis of 1988 and the global financial crisis of 2008 – 2009. Timely preventive measures in the banking system allowed to neutralize negative impact of the global financial crisis on the local banks and economy.

The institutional development of the Central Bank itself as a management institution was the key player in achievements on banking reforms and macroeconomic management. The Central Bank permanently developed the intellectual potential, created management and operational systems based upon the latest technologies and innovations over the past years.

The most up-to-date corporate governance and ethic standards dwelling in the international practice have been applied. We have shaped a system of organisational culture and values embodying high central banking traditions.

Today the Central Bank is also one of the thinktanks of the country and provides intellectual support for the socio-political growth strategy. We actively contribute to strategic projects under implementation in the country – formation of the strategy on the development of the educational system and human capital, the conceptual framework of the sustainable economic development.

Currently our country is on the threshold of new growth challenges. Our Honorable President has signed a decree on development of the growth concept “Azerbaijan 2020: glance at future”. Our strategic priority is to ensure the entry of the country to the ranks of high-income countries in upcoming years. For the economy that already takes 80 per cent of the economy of the Caucasus it is quite an understandable and realistic target.

We, being guided by these priorities and the idea of a 21st Century central bank, are determined to adequately respond to the new challenges through new strategies and innovations. Our paramount target is to transform to a modern and dynamic public institution with developed human capital. We are intending to implement tens of new projects in the upcoming strategic period to that end.

There is such a saying – “a traditional management realizes deeds through people, and the true to the fact modern management develops people through deeds”. We do the things that we do not just to resolve the issues on the current agenda, and attain short run goals. The work that we do for the sake of future in our deeds portfolio enjoys a strategic share.

I am sure, the upcoming strategic period shall be a vital stage in the realization of the idea of “a 21st Century central bank” in the proper sense of the word.

I express my deep gratitude to our Honorable President, Mr.Ilham Aliyev for his high appreciation of the Central Bank performance, for his everlasting attention and care on behalf of the entire banking society. I believe that we shall further justify the high confidence of Mr.President in the Central Bank with great enthusiasm and dignity.

Thank you for your attention.

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