YEREVAN, February 14. /ARKA/. With a faster-growing dram-denominated loan portfolio, credit dollarization in Armenia declined to 51 percent at end of 2019 from 56 percent in 2018, the historically lowest level, although, overall it is still high, the chairman of the Union of Banks of Armenia Mher Abrahamyan told reporters on Friday.

“Moreover, the share of USD in the total portfolio of the banks' liabilities and the dynamics show a downward trend,” he said.

Abrahamyan said dollarization is normal for such small countries as Armenia, and its level depends largely on both macroeconomic stability and public confidence in the national currency and also on their expectations from the economy.

According to Abrahamyan, over the past 10-15 years, the level of dollarization in the country has been gradually moving downward, backed by the government's policies. In his words, high level of dollarization creates difficulties for banks due to currency risks.

For his part, the executive director of the Union of Banks of Armenia Seyran Sargsyan noted that by the end of 2019, the shares of loans in drams and dollars were almost equal. According to him, a similar situation was observed in 2009, when loans in dollars accounted for 51% of the total lending, and 48% were in drams.

"This suggests that the struggle against dollarization is yielding results," Sargsyan said. As for deposits, he said 57% of the population still prefers to keep their savings in foreign currency and only 42% in Armenian drams.

"Banks, despite raising funds in dollars, actively lend in drams taking currency risks," Sargsyan said. -0-