YEREVAN, February 7. / ARKA /. Interest rates on deposits and loans in Armenia recorded a drop in 2016 prompted by Central Bank’s prolonged loose monetary policy. According to the regulator, interest rates on deposits in Armenian national currency, the dram, were down by 0.7 p.p. to 9.9% in December 2016 when compared to November. The interest rates on more than 12 month deposits dropped by 0.28 percentage points to 12.4%. Interest rates on less than 12 month dollar deposits fell by 0.29 percentage points to 5%.
Interest rates on more than 12 month deposits fell by 0.09 percentage points to 6.1%. Interest rates on loans in Armenian drams repayable in less than 12 months increased by 0.42 percentage points to 15.5%, while interest rates on loans repayable in more than 12 months fell by 0.58 percentage points to 16%.
At the same time interest rates on dollar loans repayable in less than 12 months decreased by 1.06 percentage points to 8.1% and loans repayable in more than 12 months decreased by 0.68 percentage points to 9.8%.
It should be noted that the rates on deposits and loans in drams were falling throughout 2016; however, the decline in rates on deposits was quite significant. Thus, interest rates on loans in drams repayable in less than 12 months decreased by 0.49 p.p. in December 2016 when compared to the same period in 2015 and the rates on loans repayable in more than 12 months fell by 0.61 percentage points, while the rate on dram deposits up to one year decreased by 4.19 pp and on those with more than 12 months term fell by 2.35 pp.
Since the second half of 2015 the Central Bank began to gradually reduce the refinancing rate. As a result it fell from 10.5% in June 2015 to 6.25% in December 2016. During this period, the regulator reduced the refinancing rate 11 times, including 8 times in 2016.-0–
