The level of development of the financial and banking systems for over 10 years is at such a level that they are able to withstand internal and external negative influences, said Tuesday the head of the stability and development of the CBA financial system Andranik Grigoryan.
According to him, macroeconomic indicators improved in comparison with the previous one in 2019.
“In the context of high internal economic growth and positive trends in the labor market, which is linked to the outflow of human resources from agriculture to other spheres, providing a more effective impact, as well as in the context of stimulating monetary policy for the first half of 2019, risks increase in financial system is not fixed. The system has maintained stability. At the same time, deepening financial intermediation continued, and the banking system recorded an increase in loan and deposit portfolios,” he said.
The CB department head explained that the higher the level of lending, the lower the level of management of the share of non-performing loans, however, in Armenia, increased intermediation contributed to the stability of the system and access to the financial market.
According to Andranik Grigoryan, the Central Bank has mechanisms that will avoid the accumulation of debts in the economy as a result of credit growth.
“We have a low level of interest on loans and a high level of deposits, but when some experts say that we have higher than, for example, in the US, you need to consider in what currency loans are provided. The cost of loans also depends on the level of customer transparency. The less the bank knows about the client, the more expensive the loan will be. As for the growth of deposits, it indicates the growth of the economy, since deposits, one way or another, go to the economy. It must be understood that in conditions of economic openness, both financial inflows and their outflows are inevitable. This balance is at zero in Armenia, that is, how much money is withdrawn from the economy, so much is introduced,” he added.
