Friday, December 28 2012 21:05
IMF is going to use Armenian Central Bank's inflation targeting experience as a sample for developing countries
ArmInfo. The International Monetary Fund is going to use inflation targeting experience of the Central Bank of Armenia (CBA) as a sample for developing countries. At today's meeting with the financial market participants, CBA Chairman Arthur Javadyan said proudly that the inflation targeting strategy conducted by the CBA over the past 10 years is estimated as one of the best strategies.
He added that the macroeconomic stabilization had also a positive effect on consolidation of stability of the Armenian financial system, which is not big, but is dynamically developing and has repeatedly proved its capability to resist the shocks. Thus, the Armenian banking system is viable and stable.
Javadyan pointed out that pension reforms were in the focus of the Central Bank's attention in 2012. Active negotiations are being held with authoritative and experienced companies to involve them in management of compulsory pension contributions funds. Among the programs of social importance, the program on privileged mortgage lending is in the permanent focus of the CBA's attention. The clients of this program are increasing in number, particularly, young doctors, teachers and sportsmen are also among the clients. Within the frames of this program, over 4,300 mortgage loans have already been refinanced. In 2012 the CBA and the Government launched a joint program on privileged provision of car loans to young families, and under this program, several subsidized car loans have already been provided. The program on subsidizing agricultural loans was continued: 38 thsd farm enterprises were financed. Agreements on implementation of new programs on agriculture and energy development loans were signed with KfW Bank (Germany).
In 2013 the bonus component of the bonus-malus system will be introduced within the motor third-party liability insurance (MTPL), and the malus component will be put off till 2014, which will reduce the MTPL policy price for disciplined drivers.
According to Javadyan, 2012 saw active integration of the real sector and the financial system. By the end of this year the assets of the financial system will make up 65% of the GDP, the loans 40% against 25% and 14%, respectively, in 2007.
Javadyan said that in the last five years the Armenian banks' intermediation activities have seriously grown and are much higher than in most of the CIS countries. Today lending activities in the industry are much higher than they were some four years ago and this is good for economic growth.
According to Javadyan, today the rates of business loans range within 10-13%, while promising businesses are given loans at 9%.
"In 2012 lending activities in Armenia grew by 25% against just 3% worldwide. Our banking system is stably growing and was quite efficient in the past year. We are entering the new year with a sense of responsibility and commitment to continue our efforts to regulate the sector," Javadyan said.
Armenian President Serzh Sargsyan said that 2012 the Government met its economic growth and tax revenue targets, while the reforms are keeping a good pace. The President wished the bankers success in the New Year and expressed hope that their activities will contribute to further economic growth.
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