YEREVAN, August 17. /ARKA/. Armenia’s financial agenda last week focused on setting up payment and cryptocurrency infrastructure, capital market activity, and the parameters of the next stage of universal health insurance.
In the non-bank lending segment, published indicators for the first half of the year recorded growth in the loan and lease portfolio and the investment portfolio of credit institutions.
1. Payment Market: The Central Bank Simplifies the Rules for Using E-Wallets
According to a statement issued on August 11, the Board of the Central Bank of Armenia approved amendments to the regulations governing the issuance and use of electronic money. The requirement to have a bank account or payment card to open an e-wallet has been abolished, and deposits and withdrawals are now available in both cashless and cashless forms. Requirements for identification and due diligence of clients under AML/CFT legislation remain in place. Regulation could create a more independent e-money segment within the payments market while maintaining current compliance requirements. For banks and payment organizations, this could mean a change in the competitive landscape in terms of basic payment services and e-wallet servicing.
2. Capital Market: Demand for Government Bonds Exceeds Issue Volume
On August 11, the Armenia Stock Exchange held an auction to place five-year government bonds worth 40 billion drams. Total demand reached 69.37 billion drams, with the weighted average yield at 7.4768% and the coupon rate at 7.6%.
Simultaneously, a new issue was introduced to the corporate debt market: IKO MACHINERY LLC announced the placement of registered coupon bonds worth 1.1 billion drams. The placement of the programmatic issue, registered with the Central Bank, is scheduled from August 17 to October 19, with Cube Invest serving as the organizer.
Two debt market segments simultaneously demonstrate the use of exchange infrastructure by both the state and private issuers. For institutional and private investors, this could expand the range of available instruments with varying yield, maturity, and credit risk profiles.
3. Cryptoassets: The Central Bank Continues to Develop the Regulatory Framework
On August 12, the Central Bank of Armenia submitted two more draft regulations for public discussion, necessary for the implementation of the Law “On Cryptoassets.” Thus, the regulator continued to develop a secondary regulatory framework for the functioning of the regulated digital asset market.
Work on secondary legislation is moving cryptoasset regulation from the legislative framework to the level of practical requirements for market participants. For the financial sector, unified rules for the operation, supervision, and interaction of traditional financial infrastructure with the newly regulated segment could be of key importance. 4. Currency Market: Dollar Ends Week Nearly at Start
According to the Central Bank, on August 10, the average market exchange rate for the dollar was 365.88 drams, the euro 422.81 drams, and the Russian ruble 4.4354 drams. On August 14, the dollar was 365.82 drams, the euro 422.74 drams, and the ruble 4.3644 drams. Thus, the dollar and euro exchange rates ended the week practically at their start levels, while the ruble depreciated by approximately 1.6%.
For banks, companies with foreign currency liabilities, and foreign trade participants, this dynamic could mean that the dram remained relatively stable throughout the week, while changes in the euro and ruble exchange rates remained a separate factor for transactions denominated in these currencies. 5. Credit Institutions: Portfolios Continued to Grow in the First Half of the Year
The total loan and leasing portfolio of Armenian credit institutions amounted to 681.8 billion drams as of the end of June, an increase of 1.64% compared to the previous quarter and 3.23% year-to-date. At the same time, the total investment portfolio of credit institutions exceeded 102.3 billion drams at the end of the first half of the year. This indicator is calculated based on the financial statements of 18 of 44 operating credit institutions.
These data indicate that, in addition to their core loan and leasing activities, investment instruments continue to play a significant role. For the market, this may indicate the simultaneous presence of credit institutions as providers of financing to the real sector and as participants in the financial asset market. 6. Investment Environment: The Central Bank Emphasized the Importance of Predictable Regulations
International investors may be deterred not so much by the risks associated with investing in Armenia, but by the unpredictability of the rules of the game and the macroeconomic environment, stated Vazgen Poghosyan, Head of the Monetary Policy Department of the Central Bank of Armenia. He emphasized the importance of a consistent regulatory environment and clear conditions for making long-term investment decisions.
In practice, the Central Bank’s focus is shifting from the formal level of investment risks to the quality of the institutional environment. For banks, investment companies, and potential foreign investors, the stability of requirements, transparency of regulatory procedures, and consistent application of established rules may be key.
7. Universal Health Insurance: A Model for Employees with Salaries of Up to 200,000 AMD is Under Discussion
On August 12, the Armenian government presented an approach for including employees with salaries of up to 200,000 AMD in the universal health insurance system starting January 1, 2027. Under the model under consideration, the state subsidizes 4,400 AMD of the monthly insurance payment of 10,800 AMD, the employee pays 2,000 AMD, and the employer contributes another 4,400 AMD. The final parameters are still under discussion.
For businesses, the key practical parameter of the model under discussion may be the employer’s participation in funding the insurance premium. For insurance and financial infrastructure, expanding coverage could mean increasing the scale of cash flows and the number of system participants.
Weekly Summary
The Central Bank expanded the use of electronic money and continued to develop regulations for the cryptoasset market, while the debt market remained active in both the public and corporate sectors. The institutional agenda saw increased attention to the payment infrastructure and the financial model for the next stage of universal health insurance.-0-
