Expert: If national currency depreciates against USD to 600AMD negative influence on bank lending will be highly significant

ArmInfo. At the background of depreciation of the national currency against USD to 600Amd/$1 amid growing prices of imported goods negative impact on the bank lending will be highly significant, economist Babken Tunyan expressed this opinion at a press conference on January 18 explaining that in the lending portfolio of Armenian banking sector USD loans have the major share.

"Taking into account the fact that the borrowers receive profits in national currency and redeem a loan in foreign currency significant strengthening of USD will raise their loan debt burden and may even lead to non-creditworthiness", the expert noted. Touching upon the economy he emphasized that more reserved policy should be conducted.

"In case AMD depreciates against USD to 600/$1 we will need to have enough export-oriented goods and products which we do not have in fact. Such policy of national currency depreciation for boosting export is appropriate for a country with normal structure of economy and legislative framework for its regulation", Tunyan stated.

According to the Financial Rating of Armenian banks, prepared by ArmInfo, share of foreign currency loans in the lending portfolio of Armenian banking system increased from 60% to 64% in 2014. As of December 1, 2015, according to the Central Bank of Armenia, it reached 66.2% or 1.3 trln AMD. As of January 18 2016, on the retail foreign exchange market exchange rate of AMD is 486 AMD/$1 in average, against 482 at the end of last year.