YEREVAN, September 12. /ARKA/. The Central Bank of Armenia is ready to apply macroprudential tools to curb “overheating” in the mortgage market, the head of the regulator Martin Galstyan told a press conference today.
“In the Financial Stability Report we included certain statements related to possible risks regarding housing prices. At the moment, we see some growth: in July, house prices in Armenia rose by 1.1% versus an 8.8% increase in July last year. We have somewhat tightened LTV (loan-to-value) macroprudential instrument. In addition, in August the requirement of countercyclical buffer (capital) with a total value of about 150 basis points came into force – we are talking about the capital of the banking system of about AMD 90 billion,” he said.
Galstyan noted that if the regulator records consistent «overheating” in this market, it will consider the issue using macroprudential tools.
On July 25, 2023, an Armenian Central Bank decided to leave the anti-cyclical capital buffet (ACB) unchanged at 1.5%. As of August 1 of this year, banks must meet the 1.5% ACB requirement.
In an August study the S&P Global Ratings noted that Armenia’s banking sector appears well capitalized, profitable and liquid, but risks remain around the mortgage market, which has grown by about 30% over the past year along with rising housing prices. -0-
