YEREVAN, June 15. /ARKA/. The week in Armenia’s financial market was influenced by decisions by international financial institutions, currency dynamics, capital market data, and the debt agenda. Monetary policy targets, Armenia’s interactions with the IMF and EBRD, and changes in mortgage policy remained in focus.
1. Monetary Policy: IMF Outlines Targets for the Central Bank of Armenia
In its statement on June 10, the International Monetary Fund recommended that the Central Bank of Armenia continue to closely monitor economic developments, inflation dynamics, and inflation expectations, and be prepared to adjust interest rates, if necessary, to return inflation to the target level.
The IMF also noted that a flexible exchange rate should maintain its role as a key shock absorber for external shocks, and that foreign exchange interventions should be limited to those addressing disordered market conditions.
This approach could maintain banks’ and investors’ focus on monitoring inflation, interest rates, and foreign exchange market behavior. For market participants, the balance between domestic price dynamics, external shocks, and the cost of funding remains key.
2. Capital Market: Equity Market Capitalization Exceeded AMD 478.8 Billion in May
On June 8, the Armenia Stock Exchange reported that equity market capitalization increased by 27.4% in May 2026, exceeding AMD 478.8 billion.
This growth in capitalization could enhance the importance of exchange infrastructure in the financial system, and for companies, it could maintain the relevance of the public market as a channel for business valuation and attracting investor attention.
3. Foreign Exchange Market: Dram Maintains Limited Dynamics Against Dollar
According to the Central Bank, the dollar-to-Dram exchange rate declined slightly over the week, from 368.53 drams on June 8 to 368.18 drams on June 12. The euro fluctuated between 424.73 and 426.09 drams, while the ruble rose from 5.0215 drams to 5.0686 drams.
The week saw the dollar/Dram pair remain stable, with cross-rate sensitivity increasing. This may continue to be important for financial institutions to monitor their currency positions and client transactions daily.
4. External Financing: IMF Grants Armenia Access to $25.1 Million in SBA Facilities
The IMF Board of Executive Directors completed the first review of Armenia’s Stand-By Arrangement (SBA). The IMF noted on June 10 that the completion of the review opened access to an amount equivalent to SDR 18.4 million, or approximately $25.1 million, bringing total access to SDR 36.8 million, or approximately $50.2 million.
The authorities view the SBA format as a precautionary instrument that maintains a focus on balance of payments sustainability and fiscal-monetary coordination.
The IMF’s decision could strengthen the institutional framework for economic policy and support confidence in the existing macro-financial management mechanisms.
5. EBRD in Armenia: New Head of Yerevan Office Appointed
The European Bank for Reconstruction and Development appointed Remon Zakaria as its new Head of Office for Armenia. This was announced on June 8. He will assume this position on September 1, 2026, replacing Giorgi Akhalkatsi, who has held this position since May 1, 2022.
Zakaria will be based in Yerevan and will be responsible for the bank’s investments and operations in Armenia. The change in the office’s head maintains the focus on Armenia’s engagement with one of the key international financial institutions – the EBRD has been operating in Armenia since 1992, investing €3 billion in 245 projects during this period.
6. Mortgages and Tax Policy: Income Tax Rebate Program Will Not Be Extended in Suburban Regions
Armenian Prime Minister Nikol Pashinyan announced on June 11 that the government does not intend to extend the income tax rebate program for mortgage interest in four regions adjacent to Yerevan. Effective January 1, 2027, the program will cease to apply in the Aragatsotn, Ararat, Armavir, and Kotayk regions.
The program, which has been in effect since 2015, provides for mortgage interest reimbursement using previously paid income taxes.
This decision may formalize the gradual phasing out of tax support in the most active construction zones. For banks, this may mean the need to take into account changes in the terms of state support when working with mortgage borrowers and developers.
7. Public Debt: Ministry of Finance Attributes Growth to Domestic Borrowing
On June 8, Armenian Finance Minister Vahe Hovhannisyan announced that Armenia’s public debt in 2025 increased by 8.8% compared to 2024. He attributed this increase largely to an increase in domestic government debt; as of December 31, 2025, public debt amounted to approximately 5.5 trillion drams, while government debt amounted to 5.3 trillion drams.
The Minister also reported that the share of domestic debt by residency increased by 1 percentage point, reaching 53%.
The change in debt structure could increase the importance of the domestic government securities market for banks, institutional investors, and liquidity management.
Weekly Summary
For banks and investors, the focus last week remained on inflation dynamics, the dram exchange rate, funding costs, capital market development, public debt structure, and changes to government support programs. At the same time, data on stock market capitalization and the role of domestic borrowing indicate the importance of local financial instruments for the overall market architecture.
