| Currency | Rate |
|---|---|
| AMD | 10.00% |
| USD |
9.75% |
| EUR |
9.00% |
| Currency | AMD |
|---|---|
| Rate | 10.00% |
| Currency |
USD |
| Rate |
9.75% |
| Currency |
EUR |
| Rate |
9.00% |
AMD Base Rate
AMD Base Rate is equal to the Refinancing (Repo) Rate announced by the Central Bank of Armenia plus a fixed margin. Repo Rate is always published on the Central Bank’s website: www.cba.am.
If there is a move (up or down) in the Repo Rate by 200 basis points (2 percentage points) since the date of last review of the AMD Base Rate by the Bank, the Bank is entitled to change AMD Base Rate. The fixed margin may be amended at any time at Bank’s discretion to reflect local or international market changes.
Explanatory Note on AMD Base Rate change
On 11 June, 2024 the Board of the Central Bank of Armenia made a decision to decrease the refinancing rate by 0.25% percentage points, setting it at 8.00%.
Thus, the cumulative decrease of refinancing rate since the last review of the Bank's AMD Base Rate (31 October 2022) has amounted 2 p.p., triggering AMD base rate review.
At the same time, the market analyses on interest rates conducted by the Bank, revealed that the continuous decrease of refinancing rates has the aim to sustainably stabilize the inflation within the target in the medium-term horizon and has not resulted in major interest rate movements in the local financial market.
Taking into consideration the above-mentioned, the Bank has decided to leave AMD Base Rate unchanged at 10.00%. On the same time aiming to respond to the refinancing rate decrease by the Central Bank, it was decided to reflect the change in base rate components, as a result of which the refinancing rate component is set up as 8.00% and the fixed margin component is set up as 2.00.%.
Thus, as a result of 20 June, 2024 review, Bank AMD Base rate remains unchanged defined as 10.00%, whereas base rate component values have been adjusted.
AMD Base rate review date 20 June, 2024.
Effective date 08 July, 2024.
USD Base Rate (amended)
USD Base Rate is equal to the US Federal Funds Target Rate (rate announced by the US Federal Reserve - Central Bank of the United States of America) plus a fixed margin. US Federal Reserve Target Rate is always published on the Federal Reserve's web-site:
https://www.federalreserve.gov/monetarypolicy/openmarket.htm
If there is a move in the US Federal Funds Target Rate by 200 basis points (up or down) since the date of the last review of the USD Base Rate by the Bank, the Bank is entitled to change USD Base Rate. The fixed margin over the US Federal Funds Target Rate may be amended at any time at the Bank's discretion to reflect local or international market changes.
USD Base Rate last review date is 06 December, 2022
Effective 20 February, 2023
Explanatory Note on USD Base Rate change
On 2 November, 2022. the Federal Reserve Funds Target rate range has been increased by 0.75 percentage points to be set at 3.75% - 4% annually. Thus, the cumulative increase of Federal Reserve Funds Target rate since Bank USD Base rate last review done on 27 March, 2018 has totaled to 2 percentage points, which is a trigger for USD Base rate review.
Simultaneously, conducted market research results reveal that the Armenian market is already witnessing USD interest rate increase, but due to financial and labor inflows as well as recorded lending levels, the USD Federal Reserve Funds Target rate increase hasn’t yet been transferred to Armenian market USD interest rates to full extend.
Taking into account the above-mentioned and aiming to act in line with trends recorded in the international and local markets, the Bank has decided to increase the value of USD Base rate Federal Reserve Funds Target rate component and set it at 4.0% and at the same time to decrease the fixed margin component setting it at 5.75% from previous 7.75%. Thus, as a result of Base rate components review, the USD Base rate has been increased by 0.5 percentage points from 9.25% to 9.75%.
EUR Base Rate (amended)
EUR Base Rate is equal to the Main Refinancing Operations Fixed Rate announced by the European Central Bank (ECB Main Refinancing Operations Fixed Rate) plus a fixed margin. ECB Main Refinancing Operations Fixed Rate is always published on the European Central Bank's web-site:
http://www.ecb.europa.eu/stats/monetary/rates/html/index.en.html
If there is a move in the ECB Main Refinancing Operations Fixed Rate by 200 basis points (up or down) since the date of the last review of the EUR Base Rate by the Bank, the Bank is entitled to change EUR Base Rate. The fixed margin over the ECB Main Refinancing Operations Fixed Rate may be amended at any time at the Bank's discretion to reflect local or international market changes.
EUR Base Rate last review date is 29 September, 2023
Effective 11 December, 2023.
Explanatory Note on EUR Base Rate change
On 20 September, 2023 the refinancing rate defined by the European Central Bank (hereinafter ECB) was increased by 0.50 percentage points, setting at 4.50%.
Thus, the cumulative increase of the refinancing rate since the EUR Base rate last revision done by the Bank on 30 December 2022 has totaled to 2 percentage points, which is a trigger for EUR Base rate review.
Market research results conducted in parallel reveal that after the Bank’s EUR Base rate last revision the trend in refinancing rate increase in the RA market continued but not to the extent of the increase in the ECB refinancing interest rate.
Considering the above mentioned and aiming to respond to the refinancing rate increase in the international market, the Bank has decided to define the value of the ECB refinancing rate component included in the EUR Base rate at 4.50% respectively. At the same time, taking into account, that RA market interest rate increase isn’t in line with the ECB refinancing rate increase, the Bank has decided to decrease the BR fixed margin component value to 4.50%.
Thus, as a result of the EUR Base rate review, the EUR Base rate value has been increased by 0.50 percentage points from 8.50% to 9.00%.
As a result, the components of the Bank Base Rate have the following values:
AMD Base Rate - 10.00%, where the Refinancing (Repo) Rate announced by the Central Bank of Armenia is 8.00% and the fixed margin is 2.00%;
USD Base Rate - 9.75%, where US Federal Funds Target Rate (rate announced by the US Federal Reserve - Central Bank of the United States of America) is 4.00% and the fixed margin is 5.75%;
EUR Base Rate - 9.00%, where the Main Refinancing Operations Fixed Rate announced by the ECB is 4.50% and the fixed margin is 4.50%.
Last updated on: 10.10.24, 03:13