YEREVAN, August 10. /ARKA/. Armenia’s financial agenda last week was determined by the Central Bank’s maintenance of current monetary conditions, indicators of the banking and non-banking credit sectors, capital market activity, the state of public debt, and decisions on attracting financing from international financial institutions.
1. Monetary Policy: Central Bank Maintains Key Rate at 6.5%
On August 4, the Board of the Central Bank of Armenia maintained the key rate at 6.5% for the sixth consecutive time. Deputy Governor Hovhannes Khachatryan pointed to factors both in favor of raising the rate and in favor of maintaining it at the current level. The decision was made against the backdrop of 12-month inflation in July at 4.5%, with the Central Bank’s target rate in the range of 3% ±1 percentage point. For the banking market, maintaining the interest rate may mean an unchanged baseline for the cost of dram-denominated funding. At the same time, actual inflation remains one of the key parameters of the current monetary conditions.
2. Banking Sector: Assets and Lending Continue to Grow
Daniel Azatyan, Head of the Union of Banks of Armenia, presented the key performance indicators of banks for the first half of the year. Thus, the total assets of Armenian banks reached 13.8 trillion drams, an increase of 8.1% year-to-date. The loan portfolio grew by 11.5% to 8.8 trillion drams, deposits by 8.2% to 8.1 trillion drams, and banking system profit for January-June amounted to 214 billion drams, 6.8% higher than the same period in 2025.
Lending growth is outpacing asset and deposit growth, reinforcing the importance of managing liquidity, funding structure, and loan portfolio quality. Meanwhile, banking system capital has grown by 3.6% since the beginning of the year, reaching 2.2 trillion drams.
For the banking sector, these indicators may indicate a further expansion of financial intermediation.
3. Bank Ratings: Moody’s Improves Outlooks for Akba Bank and IDBank
Moody’s Ratings this week changed the outlook on the long-term deposit ratings of Akba Bank and IDBank from “stable” to “positive.” In both cases, the banks’ long-term deposit ratings were affirmed at Ba3.
For Acba Bank, the agency highlighted asset quality, capital buffer, solvency, and liquidity. For IDBank, Moody’s noted capital and liquidity, profitability, and improved asset quality; the bank’s baseline and adjusted credit ratings were affirmed at ba3.
For banks, rating decisions are an external assessment of their financial profile and resilience in the current operating environment. They can also be taken into account when interacting with international financial institutions, counterparties, and investors.
4. Banking Compliance: A Plan Based on MONEYVAL Recommendations is Being Prepared
Armenia’s interdepartmental commission is preparing an action plan to implement MONEYVAL’s recommendations. According to Daniel Azatyan, head of the Union of Banks of Armenia, the program should identify specific activities, responsible individuals, and structures.
For banks, the transition from assessment to action plan can translate MONEYVAL’s recommendations into a practical compliance agenda. Coordination of requirements for financial and non-financial organizations participating in the AML/CFT system is of primary importance.
5. Foreign Exchange Market: The Dram Maintained Its Strength Against the Dollar
On the Armenian foreign exchange market, the dollar, euro, and Russian ruble exchange rates fluctuated against the dram throughout the week. According to the Central Bank’s daily data, by the end of the week, on August 7, the average market exchange rate for the dollar was 366.17 drams per US dollar, compared to 365.98 drams on August 3. The euro rose from 421.76 to 422.12 drams, while the ruble fell from 4.5639 to 4.4525 drams.
For banks and companies, this trend may indicate a lack of significant weekly revaluation of dollar-denominated assets and liabilities. More significant changes in the euro and ruble remained significant primarily for settlements, liabilities, and transactions denominated in these currencies.
6. Capital Market: Capitalization Exceeds 426 Billion AMD
The capitalization of the Armenian Securities Exchange’s stock market exceeded 426 billion drams at the end of July. Equity trading volume exceeded 207.4 million drams. Secondary trading volume in government bonds exceeded 25.8 billion drams, a 759% increase over the month, while corporate bonds reached 16.5 billion drams, an increase of 118%. The volume of repo transactions exceeded 32.1 billion drams, an increase of 548%.
The trading structure shows a significant concentration of activity in fixed income instruments and short-term funding. For market participants, the liquidity of government and corporate securities, the depth of the secondary market, and repo transactions may be of key practical importance.
7. Public Debt: Volume Reaches $13.9 Billion, Central Bank Sees No Cause for Concern
Armenia’s total public debt as of June 30, 2026, amounted to $13.9 billion, an increase of $8.5 million over the past month. Deputy Chairman of the Central Bank of Armenia Hovhannes Khachatryan stated that the regulator is not concerned about the current level of public debt. He stated that fiscal policy is assessed, among other things, in terms of the budget deficit and risk premium, and debt management is conducted within the thresholds established by law.
The debt structure may reflect an increase in the domestic component while the government’s external debt decreases. For the financial market, this is due to the role of government securities and the domestic debt market in financing government needs.
8. International Financing: Armenia to Attract ADB and IBRD Funds
The Armenian government has approved two large loans from international financial institutions. The Asian Development Bank will provide the country with $150 million in budget support as part of its fiscal sustainability and financial market development program. In addition, Armenia will attract €170.3 million from the International Bank for Reconstruction and Development to implement its economic transformation program.
For the financial market, funds from international institutions complement domestic and external sources of government funding. At the same time, measures related to credit programs may cover the development of debt and financial markets and institutional changes in the economy.
9. Credit Institutions: Assets Increased, Profits Declined
According to the ARKA news agency, the total assets of Armenian credit institutions amounted to AMD 905.17 billion at the end of June, an increase of 5.12% year-to-date. Credit investments and leasing operations reached AMD 681.76 billion, while the capital of credit institutions amounted to AMD 467.14 billion, an increase of 2.82% year-to-date. The combined net profit of 44 operating credit institutions in the first half of the year decreased by 31.6% year-on-year to AMD 21.02 billion. Ten institutions ended the reporting period with a loss.
Thus, the expansion of the non-banking credit sector’s balance sheets occurred alongside a decline in the overall financial result. For market participants, this may increase the importance of the income and expense structure, the quality of loan assets, and the capital adequacy of individual institutions.
Weekly Summary
This past week, the financial agenda saw a greater emphasis on public finances: the level of public debt remains within the current fiscal constraints, and budgetary and structural financing is being supplemented by resources from the ADB and IBRD. The main areas of focus remain the pace of bank lending relative to capital and the resource base, inflation, the structure of public debt, and the development of the domestic borrowing market.-0-
