Wednesday, February 13 2019 16:22

ArmInfo. Structural dynamics of loans of Armenian banks indicates a decrease in the level of dollarization in the country. Thus, according to the Central Bank of  Armenia, the total loan portfolio of Armenian banks as of January 1,  2019 amounted to 2.8 trillion drams ($ 5.8 billion), accelerating  y-o-y growth to 17.2% from 16.1% in 2017. In the structure of the  loan portfolio, the dram component accelerated y-o-y growth to 40.3%  from 27.4% in 2017, and the currency component, on the contrary,  slowed growth to 3.2% from 10.2% in 2017.

The volume of dram loans by January 1, 2019 reached 1.3 trillion drams ($ 2.6 billion), and  foreign currency loans - 1.5 trillion drams ($ 3.2 billion).

However, despite the slowdown in growth, foreign currency loans  continue to dominate over the dram- 54.8% against 45.2%, while in  2017 this gap was more impressive - 62.2% against 37.8%.

Over the past five years, the highest dominant of foreign currency  loans was recorded in 2015 - 66.3% and consequently the dram  component was at the minimum - 33.7%, which is similar to the 2014  gap. Analysts attribute this disproportion to external shocks coming  from Russia due to the "sanctions" collapse of the ruble, a sharp  reduction in private transfers to Armenia, a decline in exports and  imports, a significant slowdown in economic growth, which at the end  of the year led to a sharp devaluation of the dram by 40%.

It is noteworthy that in recent years the Armenian currency felt most  comfortable in 2008. Then, the dram component was 61.5%, against the  currency component, at 38.5%, in the "fattest" pre-crisis years, when  there was an unprecedented process of dram strengthening.  According  to ArmInfo analysts, the current increase in the dram component in  the loan portfolio of banks proceeded against the background of a  gradual decrease in interest rates, moreover, for dram loans, more  tangible than for dollar loans. Thus, according to the Central Bank  of Armenia, interest rates on loans decreased in 2018 from an average  of 12.1% to 10.5%, in particular for dram loans - from 14.5% to  12.5%, and for dollar-denominated loans from 9.6% to 8.6%. Moreover,  only for loans with a maturity of over 1 year, the rates decreased in  2018 on average from 12.6% to 10.9%, including for drams- from 15.4%  to 12.6%, and for dollar loans from 9.8% to 9.2%. Three years  earlier, in 2015, loan rates averaged 14.3%, in particular for dram  loans - 17.7% and for dollar 10.9%.