Wednesday, May 30 2012 22:21
Executive Director of Union of Armenian Banks: Banks will not gain from currency rate movements
ArmInfo. Square position does not allow commercial banks of Armenia to gain significantly from the currency rate movements, Seyran Sargsyan, Executive Director of the Union of Armenian Banks told media, Wednesday. He said that deposits in terms of USD exceed those in terms of AMD and this trend will be further observed due to the instability in the currency market. In the meantime, in 2008, before the global crisis, the share of deposits in AMD reached nearly 70%.
He said that bank customers that have loans in foreign currency and get incomes in terms of the national currency are subjected to tangible currency risks. In addition, when providing loans, banks, sure, take into consideration all the possible currency risks. Hence, Seyran Sargsyan warned potential borrowers against taking foreign currency loans, since in the current situation it is impossible to predict the impact of foreign currency movements on mortgage loans in the long-term outlook.
Sargsyan said that interests on both foreign exchange and national currency deposits will not rise in the the short-term outlook. Neither the loan rates will rise.
To recall, the official exchange rate of AMD against USD on May 4 was 391.87 drams versus 406.13 on May 30. Experts explain the growth with various factors, starting from "inflation" impact of the past parliamentary elections up to reduction of currency reserves of the Central Bank and certain misbalance oin the flow of transfers.
By official statistics, the aggregate loan portfolio for late March 2012 amounted to 1347.4 bln drams (nearly $3.3 bln), with foreign exchange loans totaling 826.7 bln drams (AMD equivalent). The average annual loan rate in March totaled 17.74% versus 18.62% in January.
Total deposit portfolio made up 1024.9 bln drams, including 693.4 bln drams (AMD equivalent) foreign exchange deposits. Bank raised funds in March at the average interest rate of 8.55% versus 10.7% in January.
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