ARMENIAN CENTRAL BANK: SURPLUS DRAM LIQUIDITY IN ARMENIAN BANKING SYSTEM AGGRESSIVELY GROWS

ArmInfo
2009-08-27 20:02:00

ArmInfo. Surplus dram liquidity in the Armenian banking system has
aggressively grown since July 2009 amounting to 25-35 billion drams,
Armenian Central Bank Council declared, CB press-service told ArmInfo.

The growth was registered in conditions of severe budget deficit,
which resulted in plunge in interest rates of dram financial
instruments. Thus, yield of interbank REPO-agreements fell 1.5
percentage points, in the government securities market this indicator
fell 2-4 percentage points, in particular, yield of 1-year- maturity
securities was 5.5-7.5% and that of 3-5-year maturity securities was
10-12%. CB Council also reported conformity of demand and supply in
the currency market, which resulted in certain stabilization of the
national dram against the US dollar.

The above developments led to activation in the lending market and
reduction of interest rates and growth of lending scales despite
the continuing conservative policy of the banks aimed at effective
risk management.