YEREVAN, February 4. /ARKA/. One of the phenomena faced by the Central Bank of Armenia is the huge demand for loan products, the regulator’s head Martin Galstyan said at a press conference on Tuesday.
The Board of the Central Bank reduced today the refinancing rate by 0.25 percentage points, setting it at 6.75%. It was the 14th consecutive reduction in the refinancing rate, beginning in June 2023.
“There is a colossal demand, which does not allow interest rates to drop. Today, when we looked at the ratios and types of loans in loan portfolios of the banks, we noticed that there is a significant increase in mortgage and consumer loans, especially in December. Against the background of this demand, interest rates remained at the same level,” he said.
According to the Central Bank, the volume of mortgage loans issued by Armenian banks to Armenian residents in AMD amounted to AMD 1.32 trillion in December 2024 against AMD 1.26 trillion in November of the same year and against AMD 947.8 billion in December 2023.
Meanwhile, the volume of consumer loans in December last year amounted to AMD 1.34 trillion against AMD 1.25 trillion in November of the same year and against AMD 987.8 billion in December 2023.
According to the Central Bank Chairman, one of the growth factors may be the termination of the program of preferential mortgage lending.
Asked by ARKA news agency whether he sees a paradox in the fact that the refinancing rate is decreasing while loans continue to be expensive for consumers, Galstyan noted that there is no administrative resource that can be used to force banks not to take into account the risks of issuing loans.
According to the Central Bank, the average rates on loans issued by Armenian banks for up to 1 year, excluding demand loans, were 13.71% in December 2024, compared to 13.41% in November of the same year and 12.50% in December 2023. -0-
