YEREVAN, August 3. /ARKA/. Armenia’s financial agenda last week was determined by banking sector data, rating decisions, inflation and public debt forecasts, exchange rate dynamics, personnel changes at Byblos Bank Armenia, and expert assessments of the possible impact of restrictions on goods supplies to Russia.
1. Banking sector: loan portfolio continues to expand
According to ARKA’s ranking, the total loan portfolio of Armenia’s 17 operating banks exceeded AMD 8.56 trillion at the end of June 2026, representing a 23.56% increase year-on-year. The banks’ total capital amounted to AMD 2.23 trillion, a 13.63% increase year-on-year.
For financial institutions, capital adequacy, loan portfolio quality, and alignment of lending rates with internal risk management procedures remain of primary importance. 2. Banks and the Budget: Transfers Reached 116.2 Billion AMD
Armenian commercial banks transferred 116.16 billion drams in tax and customs payments to the state budget for the first half of 2026. According to data released by the State Revenue Committee, all 17 banks were included in the list of the country’s 1,000 largest taxpayers.
According to the Armbanks ranking, on average, 0.53 drams of transfers were made per dram of total net profit in the banking system. This indicator is not an effective tax rate and includes corporate tax, income tax, VAT, customs duties, and other mandatory payments.
The volume of transfers can indicate the role of the banking system in generating budget revenues and reflects the scale of its operations. 3. Ratings: Moody’s Improves Outlooks for Armenia and Unibank
On July 29, Moody’s Ratings affirmed Armenia’s sovereign rating at Ba3 and changed the outlook from stable to positive. The agency attributed the decision to mitigating political risks, diversifying external relations, and strengthening long-term economic growth potential.
At the banking level, Moody’s affirmed Unibank’s long-term deposit ratings at B1 and its baseline credit rating at b2, raising the outlook on the deposit ratings to positive. The agency noted the bank’s asset quality, profitability, and limited dependence on less stable funding sources.
The outlook revision may result in an updated external assessment of Armenia’s operating environment and the bank’s credit profile.
4. Inflation: World Bank Forecast
The World Bank forecasts inflation in Armenia at 4.6% by the end of 2026, up from 3.3% in 2025. According to Armine Manukyan, Senior Economist at the World Bank, the main contributors to inflation are food and non-alcoholic beverages. She also cited increased healthcare costs and rising transportation costs as other inflationary factors.
The food component may be important for consumer spending dynamics and corporate operating costs, particularly in the trade, catering, and processing sectors.
5. Foreign Exchange Market: Dollar Remains Stable, Euro Strengthens
According to the Central Bank, the average market exchange rate of the US dollar to the Armenian dram was 366.72 drams on July 27 and 366.20 drams on July 31. During the period under review, the US currency depreciated by 0.52 drams. Over the same period, the euro appreciated from 417.91 to 421.13 drams, or by 3.22 drams. The Russian ruble weakened from 4.7052 to 4.6065 drams, or by 0.099 drams.
The limited change in the dollar exchange rate reduced the scale of the weekly revaluation of dollar assets and liabilities. The more pronounced dynamics of the euro were significant for import settlements, remittances, and financial transactions in this currency.
6. Public Debt: The World Bank does not see significant risks at a level of up to 50% of GDP
Armenia’s public debt in the first five months of 2026 amounted to 41.3% of GDP. According to Armine Manukyan, Senior Economist at the World Bank, this figure could approach 50% of GDP by the end of the year; however, this level is not considered a significant threat to the country’s macroeconomic stability.
For the financial market, not only the nominal amount of debt is important, but also its structure, servicing costs, maturity dates, and the rate of economic growth. The World Bank’s current assessment may indicate the continuation of a manageable debt policy regime while adhering to established budget constraints.
7. Banking Management: Hayk Stepanyan Leaves Byblos Bank Armenia
Hayk Stepanyan resigned as CEO of Byblos Bank Armenia effective August 1, 2026. The bank’s board appointed Ani Sargsyan, who served as the bank’s Chief Financial Officer, as acting CEO.
For the bank, the change in leadership signifies a transition to a new distribution of management functions while maintaining operational continuity. For clients and counterparties, the stability of corporate governance, fulfillment of existing obligations, and the maintenance of established decision-making procedures are important.
8. Monetary Policy: Expert Allows for Local Price Declines Due to Restrictions on Exports to Russia
Restrictions on the export of Armenian goods to Russia could exert downward pressure on individual consumer prices within Armenia, but this will not be sufficient to prompt the Central Bank to lower the interest rate, stated former Finance Minister Vardan Aramyan. In his opinion, if some agricultural products intended for export remain on the domestic market, increased supply could reduce prices in certain product categories, and the scale of the effect depends on the timing of the reorientation of supplies to other markets and the search for alternative routes.
For banks and companies, this could mean maintaining the current parameters for the cost of dram financing. A possible price reduction for certain agricultural products could be localized and not change the overall inflation environment that determines monetary conditions.
Weekly Summary
This past week, currency dynamics remained subdued, with inflation and public debt dominating the macroeconomic agenda. The main areas of focus remain the sustainability of banking growth, the cost of dram financing, price dynamics, and adherence to debt policy parameters.
