On February 12, 2025, in accordance with the plan of the Executive Office of the President of the Republic of Tajikistan dated December 20, 2024, No. 26/10-477, a press conference of the National Bank of Tajikistan on the results of 2024 will be held with the participation of media representatives.
To ensure media representatives have access to information about the activities of the banking system in 2024, information will be provided before the press conference.
Brief Economic Overview and Functioning of the Banking System in 2024
During the reporting period, the National Bank of Tajikistan continued its efforts toward effectively implementing monetary policy, developing non-cash payments and other financial instruments. Necessary measures were taken to ensure a stable level of domestic prices, stability of the exchange rate of the national currency, maintaining the solvency of credit institutions, and increasing public confidence in the banking system. Furthermore, the bank worked to ensure the stable and safe functioning of the payment system and the stability of the banking system.
MONETARY POLICY
Inflation rate and monetary instruments
In 2024, the inflation rate was at the lower limit of the target indicator (6±2 basis points) and amounted to 3.6 percent, which is 0.2 percentage points lower than in the previous year. This decrease is mainly due to the growth in prices of food products by 3.0 percent, non-food products by 4.0 percent, and the cost of financial services by 4.8 percent.
During the reporting year, the National Bank of Tajikistan held 120 auctions for the sale of its securities totaling 12.0 billion somoni to regulate the volume of money in circulation, manage the liquidity of credit institutions, reduce inflationary pressure, and activate the financial market. Simultaneously, free funds were attracted from credit institutions through overnight deposit operations, which averaged 1.1 billion somoni per day.
As a key instrument of monetary policy, the refinancing rate was gradually reduced by 1.0 percentage point during 2024 due to the ongoing stability in domestic and global commodity and product prices, a positive outlook for macroeconomic indicators, an assessment of the reduced impact of potential risks on the economy, and inflation remaining below the target rate. The refinancing rate was set at 9.0 percent per annum.
Situation on the domestic currency market
In the reporting year, the National Bank of Tajikistan continued its exchange rate policy in a "regulated floating rate mode," without defining or announcing the limits of exchange rate fluctuations. The official exchange rate of the somoni against the US dollar was stabilized at 0.2 percent in 2024.
Given the state of the global economy, the official exchange rates of the national currencies of most countries — the main trading partners of the Republic of Tajikistan — against the US dollar have changed. In particular, the Kyrgyz som stabilized by 2.3%, the Turkish lira against the US dollar depreciated by 19.7%, the Kazakh tenge - by 15.2%, the Russian ruble - 13.4%, the Belarusian ruble - 9.3%, the Uzbek som - 4.7%, and the Chinese yuan by 1.5%.
BANKING SYSTEM
Credit financial institutions and their structural divisions
As of December 31, 2024, there are 65 credit financial institutions operating in the Republic of Tajikistan, including 15 traditional banks, 1 Islamic Bank, 1 non-bank credit organization, 22 microcredit deposit organizations, 3 microcredit organizations and 23 microcredit funds.
The number of structural units of credit financial institutions at the end of the reporting year amounted to 1,928 units, which is 31 units more than on the same date of the previous year.
Volume of assets, liabilities and capital
At the end of 2024, assets and liabilities of credit financial institutions amounted to 47.5 billion somoni and 38.5 billion somoni, which is 26.0% (or 9.8 billion somoni) and 27.0% (or 8.2 billion somoni) more, respectively, compared to this date in 2023.
The balance sheet capital of credit financial institutions amounted to 9.0 billion somoni, an increase of 1.6 billion somoni, or 21.8%, compared to the same period last year.
Deposits
As of December 31, 2024, the total balance of deposits amounted to 25.5 billion somoni, which is 31.2% more than on the same date of the previous year.
The total amount of deposits balances in national currency was 60.5% and in foreign currency 39.5%.
As part of the total deposits balance, the share of legal entities is 11.1 billion somoni or 43.5%, and the share of individuals is 14.4 billion somoni or 56.5%.
Loans issued and loan portfolio balances
In 2024, the volume of loans issued amounted to 24.6 billion somoni, an increase of 5.6 billion somoni, or 29.3%, compared to the previous year.
Of the total volume of loans granted, the consumer sector accounts for 47.1%, foreign trade-14.6%, agriculture-12.7%, industry-12.4%, services-6.9%, construction-3.9% and other sectors-2.3%.
At the same time, it should be noted that of the total volume of loans issued, 31.1 percent accounted for manufacturing enterprises, which amounted to 7.6 billion somoni.
In the reporting year, micro-loans were issued in the amount of 17.8 billion somoni, which is 31.3% more than a year earlier.
The average weighted interest rate on loans in national currency was 22.1% and in foreign currency 11.7%, which decreased by 1.1 percentage points in national currency and 0.1 percentage points in foreign currency compared to 2023.
The balance of the total loan portfolio of credit financial institutions at the end of the reporting year amounted to 21.4 billion somoni and increased by 3.5 billion somoni, or 19.8%, compared to the end of 2023.
Stability of the banking system
The capital adequacy, which is one of the main indicators of the financial stability of the banking system, amounted to 21.8 percent as of December 31, 2024, which is 12 percentage points more than the established demand (9.8 percentage points).
As of the reporting date, the liquidity rate of financial credit institutions was 78.3 percent and increased by 48.3 percentage points compared to the established requirements.
The return on assets of credit financial institutions as an indicator of the effectiveness of the banking system amounted to 3.8 percent, and the return on capital was 20.7 percent.
As of December 31, 2024, passive loans account for 7.1 percent of the total loan portfolio, which decreased by 5.4 percentage points compared to the same date in 2023.
Payment system
As of December 31, 2024, the total number of bank payment cards amounted to 8.4 million units, an increase of 25.7% compared to the same date of the previous year.
The total number of electronic wallets amounted to 12.1 million units, an increase of 38.6% compared to the same date of the previous year.
As of the reporting date, financial credit institutions have installed 11,955 electronic terminals in banking service centers and trade and service points. Of these, 5,530 POS terminals are used specifically for accepting non-cash payments for state services. Additionally, 19,918 unique QR codes have been installed in trade and service establishments, with 3,161 specifically designed for accepting payments for paid state services.
To enable customers to top up their bank accounts, payment cards, and electronic wallets, financial credit institutions and their payment banking agents have installed more than 9,100 automated terminals on the streets and avenues of cities and districts throughout the republic.
In 2024, 92.4 million non-cash transactions worth 30.4 billion somoni were carried out using electronic payment instruments (bank payment cards and electronic wallets), which increased by 61.7% in number and 95.3% in volume compared to 2023. The ratio of cash withdrawals to non-cash transactions was 73.8% to 26.2%, and the share of non-cash payment transactions increased by 6.6 percentage points compared to the previous year.
Insurance system
At the end of 2024, 16 insurance companies operated in the republic, including one state-owned company and 15 non-state companies with 66 branches. These companies provided insurance services to the republic's population.
The results of a summary of the country's insurance system in 2024 showed that the sector's key indicators were growing. This growth included an increase in the system's assets by 10.5% compared to the previous year, capital by 19.6%, authorized capital by 45.1%, insurance reserves by 2.5%, insurance payments and compensations by 26.6%, investments by 32.7%, deposits in credit financial institutions by 37.0%, and taxes paid by 24.4%.
During the reporting period, insurance system assets represented 1.7 percent of total financial system assets and 0.6 percent of GDP.
At the end of the reporting year, insurance organizations achieved a return on assets of 13.7 percent and a return on capital of 22.4 percent, which were 1.8 and 1.5 percentage points higher than at the end of the previous year, respectively.
Appeal of citizens
The National Bank of Tajikistan constantly monitors compliance with the requirements of the Republic of Tajikistan’s Law “On Appeals of Individuals and Legal Entities” and its implementation.
In this regard, during the reporting year, the National Bank of Tajikistan received 1,568 appeals, including 794 via hotline, 519 through direct reception of citizens, 230 in writing (applications), and 25 by email. All appeals were resolved in accordance with established procedures.
Personnel policy
The National Bank of Tajikistan, as well as credit financial institutions pay special attention to attracting more qualified and experienced women and girls to work in banking institutions and promoting them to management positions.
According to statistical data, at the end of the reporting year, the total number of employees in the banking system was 20,751, of which 8,431 were women (40.6% of the total). This represents an increase of 820 women compared to the same period of the previous year.
Of these, 7,873 women work in front-office (4,398) and back-office (3,475). Of total number of women working in the banking system 558 hold management positions.
International relations
The National Bank of Tajikistan has established fruitful cooperation with international financial organizations such as the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, the Islamic Development Bank, the Eurasian Development Bank, the Interstate Bank, the Financial Access Union, international funds, central (national) banks, and banking structures of foreign countries.
As a result of taking necessary measures, in 2024, foreign capital (loans, direct investments, and other types of investments) amounting to $4.2 billion was attracted to the country's banking system, which is 88.7% more than in the previous year.
In the reporting year, the International Monetary Fund's Board of Directors approved the Policy Coordination Instrument (PCI) for the Republic of Tajikistan. This program, implemented over a 22-month period, aims to maintain macroeconomic stability, strengthen the country's political foundations, and support its efforts toward more sustainable and inclusive growth.
In July 2024, the first IMF and World Bank Group Constituency meeting was held in the Republic of Tajikistan. Over 70 people at the management level from the IMF, the World Bank, ministries of finance, and central banks of Switzerland, Azerbaijan, Poland, Serbia, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, and other foreign countries attended.
In August 2024, the international rating company Standard & Poor's upgraded the Republic of Tajikistan's international sovereign credit rating from "B-" to "B" with a "stable" outlook.
In September 2024, the rating agency Moody's affirmed the Republic of Tajikistan's international sovereign credit rating at "B3" and upgraded its outlook from "stable" to "positive" due to improved economic indicators.
These assessments predict future improvement in Tajikistan's economic situation and indicate the stability of the country's economy and its stable financial situation.
The National Bank of Tajikistan will continue to take necessary measures to effectively implement monetary policy, strengthen regulation and supervision of credit institutions' activities, protect the rights and interests of banking service users, ensure transparency in credit financial institutions' activities, and thus maintain public confidence in the banking system.
Views: 6615
10.02.2025
