YEREVAN, April 3, / ARKA /. The cost of short-term loans provided by Armenian banks in the national currency, the dram, has increased, according to data of the Central Bank of Armenia.

For example, interest rates on loans with a repayment period of up to 12 months increased by 1.6 percentage points in 2015 February when compared to February 2014. If compared with the beginning of this year they were up 2.5 percentage points standing at 18.71%. As for loans in USD, their interest rates did not change compared to 2014 February, but when compared to the beginning of this year they increased by 0.74 percentage points

The rise occurred after the Central Bank raised its key refinancing rate to 10.5% and amid reducing liquidity in dram that was prompted by the Central Bank’s decision to toughen the reserve requirement in foreign currency.

Thus, according to the latest data from the regulator, the banks’ liquidity in January 2015 was 24.5%, a decrease of 6.4 percentage points from January 2014.

Under the Central Bank’s decision, the reserves in foreign currency must be secured entirely in drams. This in turn has brought about additional burden on the banks in conditions of weakening dram. Due to shortage of dram liquidity, in January 2015 some Armenian commercial banks cut on their lending, giving loans only to their ‘reliable’ customers.

At the same time, to attract dram liquidity the banks raised rates on deposits. According to the Central Bank, in February the rates on deposits in drams maturing in 12 and less months was 13.99%, an increase of 4.17 percentage points from February 2014. It was 1.46 percentage points higher if compared with the beginning of the year. Some banks raised the rate even to 16-18%.

The rate of interests on deposits in USD in February 2015 stood at o 5.05%, down 1.82 percentage points from February 2014 and 0.26 percentage point from the beginning of the year.

Interest rates on long-term loans in drams decreased by 1.48 percentage points from February 2014 and by 0.4 percentage point from the beginning of the year reaching 16.68%. Interest rates on long-term loans in USD stood at 12.3% in February. 0-