In September 2015, VTB Bank will submit a strategy of further activities in Armenia for discussion of the VTB Group's Supervisory Council headed by Russian Minister of Economic Development Alexei Ukyukayev, Deputy President and Chairman of VTB Bank Management Board Mikhail Oseevskiy told
reporters in Yerevan.
Oseevskiy thinks that the political and economic rapprochement of the countries within the Eurasian Economic Union dictates the need to develop cooperation mechanisms and tools and to search for new approaches that would be useful for development of VTB Group's activities in Armenia to effectively support the Armenian and Russian businesses on the joint markets.
According to him, over the past few years VTB Bank (Armenia) has successfully been developing in both directions - corporate and retail business. "It is obvious that the ongoing changes on the global markets, including the oil market, seriously affect the economies of the countries engaged in oil extraction. As a big actor, Russia has a serious impact on all its trade and economic partners that sell their commodities and services on the Russian market. Armenia is one of the brightest examples. We see that the national currencies are weakening, and this is typical to all developing markets. The United States has a strong influence in expectation of the discount rate growth; dollars and their instruments are becoming quite attractive. Therefore, we expect further depreciation of national currencies and it also requires us to make the relevant adjustments," stressed Oseevskiy. He noted that during a meeting with the leadership of the Central Bank of Armenia (CBA) and the Armenian Government they discussed new approaches to cooperation. "We give high priority to rendering further support to Armenianmanufacturers who sell their goods and services in Russia. Probably, this is the most important economic and political task we should perform," he said. First of all, the matter concerns RUR lending to Armenian manufacturers working on the Russian sales market.
"Given the complicated exchange rate fluctuations, we will offer the Armenian producers to borrow RUR loans to reduce the currency risks. We see that it is difficult to control the situation when the loan is
provided in USD terms, the prime cost of the goods is formed in AMD and the goods are sold in Russia in RUR terms," he said. He stressed the need to overcome the so-called cross-border risks by allowing the economic entities to work in the national currencies. "If Armenian companies sell their goods and services in Russia, Belarus or Kazakhstan, we should be ready to support them and provide them with
services in the national currencies of those countries. All global banks work in this manner and we also can carry out that mission. This is a long-term mission, so is the Eurasian economic community project," stressed Oseevskiy.
When asked by ArmInfo about the possible hidden reefs, Oseevskiy pointed out that formally VTB Group can provide loans to the national companies both through its subsidiary and directly from Russia. Today there is no RUR lending practice in Armenia. In the meantime, he noted that such operations with Belarusian manufacturers have intensified and there is already a big demand for Russian rubles. So,
the same practice may be introduced in Armenia. "If you work on the Russian market, nothing will happen to your balance despite the RUR exchange rate fluctuations. Nevertheless, psychologically, the
difference between the rates affects the lending decisions. The forex loans are provided at low rates of 8-10% p.a., whereas those of the loans provided in AMD range within 20-25%. This is not comfortable," he said. "In Russia we issue RUR loans at 14-15% p.a., which is more or less convenient. So, we hope the same practice will be formed in Armenia as well," he said.