ArmInfo. During a press conference on October 29, Martin Galstyan, the chairman of the Central Bank of Armenia, stated that there is a significant demand for consumer and mortgage loans in Armenia, and since the refinancing rate of the Central Bank is essentially unitary, it can have a dual effect on the market in the event of high demand for credit resources.
According to him, despite the increase in lending volumes in the country, there will be no reduction in rates, since demand leads to an increase in cost. "We assume that if we had not reduced the refinancing rate from 9.75% to 7.25%, we would have had a significant increase in credit rates. But since we have significantly lowered the rate, while the country has maintained a huge demand for credit products prompted in turn by high economic growth over the past three years and external demand, credit rates are not showing a downward trend," he said.
At the same time, Galstyan noted that the government bond market is more sensitive to the regulator's actions, the yield on which has dropped from 12% to 9.5% over this period. Credits also react to the balance of supply and demand. "I would like to emphasize that today the Risk-free rate in our country is approximately 9.5%. That is, in fact, rates on long-term credit products cannot be below this level, as preference will then be given to the purchase of government bonds rather than corporate or retail lending. This is why we are consistently influencing the reduction of the Risk-free rate," he explained.
It should be noted that according to the RA Statistical Committee, interest rates on dram loans in Armenia in August 2024 amount to 13.37%, compared to 12.33% for the same period in 2023.
