YEREVAN, April 7, /ARKA/. The decision of the Central Bank of Armenia (CBA) to toughen the normative on foreign currency position will not have any impact on the bank’s policy on attracting deposits, HSBC Bank Armenia CEO, Astrid Clifford, told ARKA. According to her, a change in the reserve requirements, implemented by CBA as part of its monetary policy is mainly aimed at reducing dollarisation levels of the Armenian economy.
‘The change on reserve requirements will result in the increased cost on foreign currency deposits attracted by banks, so we anticipate that interest rates on foreign currency deposits will start gradually reducing and the difference between interest rates on local currency deposits and foreign currency deposits will increase,’ she said.
Under the current mandatory reserve requirement of the Central Bank Armenian commercials banks must reserve 12% of their deposits in foreign currency and 8% of deposits in Drams at the Central Bank. Under a new change of the normative to be effective from April 14, 25% of the 12% of deposits in foreign currency (i.e. 3%) must be reserved in the national currency. Besides, banks must ensure 18% of loans in foreign currency by their own capital, up from THE current 12%. -0-
