ArmInfo.At the moment, the reduction of the key rate does not affect interest rates on loans. Head of the Central Bank of Armenia Martin Galstyan stated during a press conference on June 11.
However, in the case of a positive development of processes, and if the Regulator continues to reduce the refinancing rate, and the uncertainty component in some sense disappears from the economy, then, according to the head of the Central Bank, interest rates on loans will begin to decline. "When we gradually increased the refinancing rate - from 4% to 11%, then, for example, mortgage rates did not increase proportionally by 7 p.p. The growth was registered at a level of 1.5% to 2%," Galstyan said. That is, there was no proportionate growth, either at the upper or lower threshold.
At the same time, he noted that the lending activity of banks also depends on what deposits they managed to attract. "The question is how much the average citizen or business is ready to lend a bank. For example, are they ready to invest in a deposit at a rate of 6%, so that the bank will then lend at 9-10% per year?", - the head of the Central Bank asked.
When asked what the purpose of reducing the key rate is, Martin Galstyan noted that in a certain sense this should stimulate activity, but the accompanying factors that are present both in Armenia and in the region, as a whole, are still having a negative impact. "We are trying to activate the economy through such channels, but geopolitical factors play an extremely important role here," he noted, naming in this vein the Russian-Ukrainian conflict, Armenian-Azerbaijani relations, the process of demarcation and delimitation of the border.
Today the Board of the Central Bank of the Republic of Armenia decided to reduce the Refinancing Rate by 0.25 percentage points - setting it at 8% from 8.25%. In accordance with this, the Lombard Repo Facility Rate was set at 9.5% from 9.75%, and Deposit Facility Rate was set at 6.5% from 6.75%. According to the Statistical Committee of the Republic of Armenia, as of the end of April this year, the average indicator of Armenian banks' credit rates in drams is 12.50%, on deposits - 8.43%.
