YEREVAN, 19 July. /ARKA/. The Central Bank of Armenia has decided to leave the countercyclical capital buffer (CCB) of banks unchanged at the level of 1.5 per cent.
The regulator made this decision after analysing the following facts.
In the first quarter of 2024, the financial cycle index remained virtually unchanged compared to the previous quarter. In the same period, the credit-to-GDP ratio was also unchanged at around 65.4 per cent. Its deviation from the long-term level (the gap between credit and GDP) remains negative and amounts to about -9 p.p.
The growth rates of the total volume of lending in the current quarter did not change significantly, with the loans paymewnts by households and businesses being comparable. The current situation in the credit market and the position of the financial cycle indicate that cyclical systemic risks in the financial system as a whole remain balanced.
The trend of slowdown in mortgage lending growth rates noted in previous years continued. At the same time, stabilisation of real estate prices and a slight decrease in rental payments were recorded, which may indicate signs of stabilisation of the situation in this sphere and a reduced probability of further risk accumulation.
The dynamics of the aggregate loan portfolio does not contain obvious signs of excessive (risky) lending. In general, the risks of financial stability in the current period have not changed compared to the last quarter.
Future changes in the CCB rate, both upward and downward, will depend on further development of macro-financial conditions, uncertainty and systemic risks,’ the regulator said in a statement.
On 25 July 2023, the Central Bank of Armenia decided to set the countercyclical capital buffer at 1.5%. There are currently 18 banks operating in Armenia. -0-
