50 percent of Armenian banks forecast higher interest rates for deposits

YEREVAN, October 15. /ARKA/. Almost half of the Armenian commercial banks (11 out of 22) forecast rise in interest rates for short-term dram deposits by late December, compared to early September.

The others, including five leading local banks, do not think that is apt to happen, the Central Bank of Armenia (CBA) reports in its quarterly survey of commercial banks and credit organizations.

Nine banks, who have 30.28% share in total bank assets, say interest rates for long-term deposits are likely to remain unchanged. Thirteen banks forecast higher interest rates for long-term deposits.

As to foreign-currency deposits, 12 banks think rates for long-term and short-term deposits will remain unchanged, whereas the rest of the banks expect higher rates.

Local banks forecast 41.8bln drams growth in attracted deposits by late December and 72bln drams increase in March 2009 (compared to September 2008). The banks expect to attract foreign investments worth 26.8bln drams in Q4 2008 (33.3bln drams in Q1 2009).

According to CBA, liabilities of Armenian banks totaled 712.7bln drams in early September, with 203.5bln worth fixed liabilities and 257.9bln worth short-term liabilities. The rest of the sum is loro accounts of banks and liabilities to financial organizations.

Average interest rates for short-term dram deposits were set at 7% in September 2008. Interest rates for dollar deposits to individuals were 5.3% in the same period. Average interest rates for legal entities were 6.3%. Annual interest rates for foreign-currency deposits were 
set at 2.5%.

Twenty-two commercial banks are currently operating in Armenia. Z. Sh. -0--