Monday, June 14 2010 13:50
EBRD forecasts further reduction of interest rates in Armenia
ArmInfo. The European Bank for Reconstruction and Development forecasts reduction in the interest rates of AMD and USD loans in Armenia, Head of EBRD Yerevan Office Valeriu Razlog said in an interview to ArmInfo.
He said that the key cause is that the Armenian banks have lots of short-term liquidity and the possibility to get long-term resources. This tendency is already present: some banks have already started lowering rates and the others are following suit. One should not expect a slump though. The rates will decline smoothly but it is hard to say how far low they will go. Razlog said that the drop will not cause inflation. The Central Bank is doing enough to target the inflation and, according to EBRD's projections, this year it will not be a two-digit figure.
Meanwhile, the National Statistical Service of Armenia reports that in May 2010 there was 1% inflation on Armenia's consumer market, in Jan-May 2010 - 5.3%. In late Mar 2010 the interest rates of AMD loans given to legal entities ranged within 14.3%-15.2%, those of USD credits lent to legal entities - within 13.1%-13.6% depending on repayment terms; the rates of AMD loans given to physical entities ranged within 18.6%-22.3% (for mortgage loans - 13.4%), those of USD credits lent to physical entities - 17.8%-19% (mortgage - 15.2%) depending on repayment terms.
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