YEREVAN, May 10. /ARKA/. The level of Armenian economy’s dependence on U.S. Dollar (dollarization) is about 65%, according to Chief Executive Officer of HSBC Bank Armenia, Astrid Clifford. Speaking at a news conference today she said the ratio of savings deposits in foreign currency to deposits in the national currency, the dram, is 65% to 35%.
She said after the Central Bank changed the mandatory reservation norms as part of a plan to enhance confidence in the national currency (now the minimum amount of mandatory reserves placed in the central bank for financial resources in foreign currencies, which make up 12%, all 12 percent must be reserved in drams. Previously 9 percent were to be reserved in drams and 3% in foreign currencies) the rates on deposits saw some growth but later the situation stabilized. She said by enforcing this requirement the Central Bank aimed to push for the drop in interest rates on dollar deposits, which is supposed to be an incentive for people to have their savings deposits in the national currency.
She said HSBC Bank Armenia has already reduced interest rates on deposits in drams to 9% and those on deposits in USD to 3%.
According to the Central Bank of Armenia, the level of Armenian economy’s dollarization (the ratio of deposits of residents in foreign currency to the country’s money supply) was 43.6% at the end of February 2012, a 0.1 percentage point decrease compared with January.
JSC HSBC Bank Armenia is a member of HSBC Bank plc. It was registered in Armenia in 1995. Its shareholders are HSBC Europe BV that owns a 70% stake and Wings Establishment (30%). HSBC Bank Armenia joined NASDAQ OMX Armenia stock exchange in 2009. The Bank offers a variety of services to its individuals and legal customers, including individual credit services, commercial lending, as well as transactions in financial markets. To date, the bank has more than 35,000 individual and about 5000 corporate customers. -0-
