YEREVAN, April 2. /ARKA/. The total liquidity level (high-quality liquid assets to total assets) of Armenia’s commercial banks dropped by 4.4 percentage points to 25.1% in 2014, the website of the Central Bank of Armenia (CBA) says.
According to the central bank, the banks’ total liquidity level has dropped smoothly, unlike the current liquidity (high-quality liquid assets to demand liabilities) ratio that dropped by 12.9p.p. from 142.3% in the beginning of 2014 to 129.4% at the end of the year.
This ratio dropped steeply in December, when the central bank raised the currency reserve requirement from 12% to 24% (it is 20% now). Consequently, banks’ current liquidity ratio fell by 5.7 percentage points – from 135% in November to 129.4% in December.
It should be mentioned that Armenian banks are well above the norm requirement of 15% for total liquidity (25.1%) and the norm of 60% for current liquidity (129.4%).
Some analysts say despite the fact that the reserve requirement was lowered to 20%, it is still a high level that puts pressure on bank’s liquidity level. –0—
