BAKU, Azerbaijan, March 1. Tajikistan’s banks gained from inflows of capital and remittances from Russia in 2022, Trend reports with reference to Moody’s Investment Service.
Moody’s said that higher remittances from the CIS (the Commonwealth of Independent States) workers in Russia benefited Tajikistan’s banks in the reporting period. Russian demand for the migrant workforce from Tajikistan supported large money transfers into the workers' home countries.
However, Moody’s noted that while some CIS banks achieved gains last year as a result of the Russian-Ukraine conflict, the situation will likely deteriorate in the coming years.
According to Moody’s forecast, the further weakening of the Russian economy would result in a decrease in remittance flow for the banks of Tajikistan.
A sharp reduction of remittances to Tajikistan would hinder the economic activity in the country, hurting the credit quality of borrowers, as well as the profitability, capital, and liquidity of local banks.
Meanwhile, Moody’s pointed out that support from sovereigns can help shield some banks from the abovementioned risks.
Moody’s Investment Service provides data, analytical solutions, and insights into decisions in financial markets. Moody’s operates in more than 40 countries.