Reduced government bond yield to change bank rate in Armenia – Minister

30.01.2014 12:43
Reduced government bond yield to change bank rate in Armenia – Minister

YEREVAN, January 30. /ARKA/. Reduced yield on government bonds will lead to changes in Armenia’s bank rates, Armenia’s minister of finance David Sargsyan told a press conference Wednesday.

According to Central Bank information for November, yield is about 8.6% for short-term bonds, 10.2% for mid-term and 15.6% for long-term bonds.

The minister said AMD bond yield declined by 4-4.5 percentage points already in December. Yield of 5-year bonds is 9.99% now compared to about 14% before; that of 20-year bonds is 11.6% against 16.4% before.

The market of dram government bonds will continue changing due to consistent measures that allowed issuing euro bonds, the minister said.

In fact, Armenia demonstrated to investors that it is no sense to attract dram bonds at 14-16% when dollars bonds at 6.25% can be attracted, Sargsyan said.

According to the minister, this led to reduced rates in Armenia’s bond market.

It will have a serious impact on interest rates on deposits and loans offered by Armenia’s banks, the minister said. Certain changes could be expected this year, he added.

Armenia issued its debut euro bonds on September 19, 2013. Total volume of the issue was $700 million; the maturity was seven years and yield at 6.25%. The main underwriters were Deutsche Bank AG, London Branch, HSBC Bank plc and J.P.Morgan Securities plc.–0--


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