Martin Galstyan: If background is favorable, reduction in key rate  will result in lending rates decrease

ArmInfo.Over time, if the general background is more favorable, with a parallel decrease in the  refinancing rate, we will see a certain reduction in rates on loan products.  This was stated by Governor of the Central Bank of Armenia Martin Galstyan during a meeting of the  RA NA Standing Committee on  Financial-Credit and Budgetary Affairs.

At the same time, he recalled that with the gradual increase in the  key rate from 4.25% to 10.75%, the increase in bank lending rates was  disproportionate, but lower. As an example, Galstyan referred to  rates on mortgage loans, which are more in demand among the  population, noting that the latter increased in the range of 1.5%-2%  during this period.

"Now we see that our reduction in the refinancing rate mainly affects  the reduction in government bond yields. The yield curve has  decreased significantly as a result of our decisions," said the head  of the Central Bank.

Notably, on April 30 of this year, the Board of the Central Bank  reduced the refinancing rate by 0.25 percentage points, from 8.5% to  8.25%. The previous reductions in the refinancing rate in 2024 took  place on January 30, 2024 - by 0.5 percentage points from 9.25% to  8.75% and then on March 12, 2024 - by 0.25 percentage points, from  8.75% to 8.5%.

According to the data of the Statistical Committee, as of the end of  March this year, the average indicator for lending rates for AMD  loans of Armenian banks is 12.28%, for deposits - 8.03%.