YEREVAN, November 29. / ARKA /. The overall lowering of interest rates on bank loans and deposits has brought about new opportunities for the development of Armenia’s corporate bonds, Ameriabank’s director for retail operations Arman Barseghyan told an online press conference.
According to the Central Bank, as of late October 2017, the rates on loans in Armenian drams repayable within 12 months decreased by 2.3 percentage points from the beginning of the year to 13.17%, while the rates on deposits fell by 1.33 percentage points to 8.77%.
According to Barseghyan, the lowering of the rates allows people to consider alternatives and more expensive deposit instruments, such as corporate bonds.
At the same time he noted that today it is beneficial for commercial companies to issue bonds in the event they have an appropriate risk profile, institutional consistency and a high level of corporate governance.
“The interest rate lowering trend will promote activity in the corporate bond market. High rates for many years were the main constraint of the development of the capital market. It was hard for potential investors to regard capital market instruments as profitable, although there was no risk for them to invest their funds in deposits. Today, there is no such opportunity, and they should consider alternatives for investing ,” he said. -0-
