YEREVAN, October 7. /ARKA/. Samvel Chzmachyan, head of the Union of Banks of Armenia, explains the current upward motion of interest rates on deposits by the dwindling money flow from international financial institutions to Armenian banks.

In his words, international financial organizations that traditionally invested money into Armenia’s banking sector have lost billions of dollars because of a new recession in Europe. As a result, Armenian banks have their outside financing reduced.

“Everything is interrelated, and we all depend on each other,” he said. “However, some signs of recovery are already seen in Europe’s economy, and I think they will impact also things in Armenia.”

Chzmachyan said when things in Europe improve, Armenian banks will get an opportunity to attract cheaper financial resources and deposit interest rates will go down.

Armenia ranks fifth among CIS countries for investments attracted from international development banks – the Asian Development Bank, the Eurasian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the International Finance Corporation, the Black Sea Trade and Development Bank. Their investments in Armenia total $81.1 million.

An average deposit interest rate in Armenia rose from 8.9% in August 2012 to 9.3% in August 2013.
In late July 2013, an average interest rate on individual deposits in drams was 12.9% and on individual deposits in foreign currencies 8% against 12.4% and 8% respectively in July 2012. -0---