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LOWERED REFINANCING RATE IN ARMENIA WILL STIMULATE LENDING BY COMMERCIAL BANKS: IMF REP.
ArmInfo
2009-08-27 20:04:00
ArmInfo. Lowered refinancing rate in Armenia is expected to
stimulate lending by commercial banks, says Nienke Oomes, permanent
representative of IMF to Armenia. "The lower refinancing rate will
make it cheaper for banks to borrow money from the Central Bank of
Armenia, and they can now do this also at a longer maturity", she
said. To remind, another measure by the CBA to stimulate the financial
market was increasing the maturity of the REPO operations from one
day to three months. "Unfortunately, in Armenia the link between
the refinancing rate and the actual lending rates of banks is not
very strong. But given the significant reduction in the refinancing
rate, we should expect to see some effect", she said. To remind, on
August 11 the Central Bank of Armenia lowered the refinancing rate
by 0,25% to 5,25%, compared to 7,75% before and immediately after
the depreciation of dram in March 2009.
The exchange rate of the Armenian currency, after a
significant depreciation in March, has not displayed any signs of
instability. While the share of dram deposits in total bank deposits
fell from about 65% before the depreciation to roughly 35% afterwards,
it has been broadly stable since then. "After the large depreciation
in March, there hasn't been much further increase in dollarization
of the financial system, which is a very good sign, because it means
that people, on average, believe that the dram/dollar exchange rate
is approximately in equilibrium", she assumed.
ArmInfo
2009-08-27 20:04:00
ArmInfo. Lowered refinancing rate in Armenia is expected to
stimulate lending by commercial banks, says Nienke Oomes, permanent
representative of IMF to Armenia. "The lower refinancing rate will
make it cheaper for banks to borrow money from the Central Bank of
Armenia, and they can now do this also at a longer maturity", she
said. To remind, another measure by the CBA to stimulate the financial
market was increasing the maturity of the REPO operations from one
day to three months. "Unfortunately, in Armenia the link between
the refinancing rate and the actual lending rates of banks is not
very strong. But given the significant reduction in the refinancing
rate, we should expect to see some effect", she said. To remind, on
August 11 the Central Bank of Armenia lowered the refinancing rate
by 0,25% to 5,25%, compared to 7,75% before and immediately after
the depreciation of dram in March 2009.
The exchange rate of the Armenian currency, after a
significant depreciation in March, has not displayed any signs of
instability. While the share of dram deposits in total bank deposits
fell from about 65% before the depreciation to roughly 35% afterwards,
it has been broadly stable since then. "After the large depreciation
in March, there hasn't been much further increase in dollarization
of the financial system, which is a very good sign, because it means
that people, on average, believe that the dram/dollar exchange rate
is approximately in equilibrium", she assumed.