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Retail Base Rate Update

Effective from 28 October 2020

Dear Customer,

Following a review of the bank’s retail base rates (RBR) for all currencies, please be advised that AMD and EUR retail base rates have remained unchanged, while USD and GBP retail base rates have decreased. This change will be effective from 28 October 2020.

Please see the changes with the explanatory notes below.

AMD RBR

The RBR for AMD will remain at 9%

How we calculated this

As of 25 August 2020, according to Central Bank of Armenia (CBA) publication, the weighted average of AMD retail deposit rates of the Republic of Armenia (RA) banking sector - with maturity of 181 days to 1 year for June and July 2020 - is 8.8% and 8.9% respectively. Thus, the primary reference rate, calculated as the simple average of the latest available 2-month data as of the review date, is equal to 8.9%.

Taking into consideration that, as of the review date, the difference between the effective RBR (9%) and the calculated reference rate does not exceed 0.5 percentage points, the value of the RBR as a result of the review stays unchanged for the next period and is set at 9%.

 

Reference rate explanatory note

Primary reference rate. As per RBR review date on 25 August 2020 the latest data available in the CB RA publication “Volumes and interest rates of deposits attracted from and loans extended to real sector by commercial banks” is as of June and July 2020.

Taking into consideration that as per this CBA publication, the weighted average of AMD retail deposit rates of RA banking sector - with maturity of 181 days to 1 year for June and July 2020 - is 8.8% and 8.9% respectively, the primary reference rate calculated as the simple average of available latest 2-month data as of 25 August 2020 is set at 8.9%.

 

Reference rate explanatory note

Secondary reference rate (published for informational purposes only). As per the RBR review on 25 August 2020 the latest data available in the CBA publication on “Interest rate of deposits attracted by commercial banks (monthly)” is as of June and July 2020.

Taking into consideration that, as of the review date, the simple average of AMD retail and corporate deposit rates of the RA banking sector with up to 1 year and 1 year plus buckets is 8.68% ((7.92% + 9.44%)/2) for June 2020 and 9.055% ((8.14% + 9.97%)/2) for July 2020, the secondary reference rate, calculated as the simple average of data available for the latest 2 months and rounded to one decimal place as of 25 August 2020 is set at 8.9%.  

USD RBR

The RBR for USD has decreased to 3.3 %

How we calculated this

As of 25 August 2020 according to CBA publication, the weighted average of USD retail deposit rates of RA banking sector with maturity of 181 days to 1 year for June and July 2020 is 3.3%, thus, the primary reference rate calculated as the simple average of available latest 2-month data is equal to 3.3%.

Taking into consideration that as of the review date, the difference between the effective RBR (3.9%) and the calculated reference rate exceeds 0.5 percentage point, the value of the RBR is matched to the primary reference rate as a result of the review and set at 3.3% for the next period.

 

Reference rate explanatory note

Primary reference rate. As per RBR review on 25 August 2020 the latest data available in CB RA publication “Volumes and interest rates of deposits attracted from and loans extended to real sector by commercial banks” is as of June and July 2020. Taking into consideration that as per CBA publication, as of the review date the weighted average of USD retail deposit rates of RA banking sector with maturity of 181 days to 1 year for June and July 2020 is 3.3%, the primary reference rate calculated as the simple average of available latest 2-month data as of 25 August 2020 is set at 3.3%.

Secondary reference rate (published for informational purposes only). As per RBR review on 25 August 2020, the latest data available in CBA publication “Interest rate of deposits attracted by commercial banks (monthly)” is as of June and July 2020. Taking into consideration that as of the review date, the simple average of USD retail and corporate deposit rates of RA banking sector with up to 1 year and 1 year plus buckets is 3.325% ((2.48% + 4.17%)/2) for June, 2020 and 3.205% ((2.21%+ 4.20%)/2) for July, 2020, the secondary reference rate, calculated as the simple average of data available for the latest 2 months and rounded to one decimal place as of 25 August 2020 is set at 3.3%.  

EUR RBR

The RBR for EUR will remain at 2.5%

How we calculated this

As of 25 August 2020 according to European central bank publication, the simple average of €STR index for the available last six months’ data in the period of 25 February 2020 to 24 August 2020 rounded to one decimal place is -0.5%. The primary reference rate, calculated as the sum of the latter and 3% fixed margin, is set at 2.5%.

Taking into consideration, that as of the review date the difference between the effective RBR (2.5%) and calculated reference rate does not exceed 0.5 percentage points, consequently, the value of the RBR as a result of the review remains unchanged and is set at 2.5%.

 

Reference rate explanatory note

Primary reference rate: As per RBR review on 25 August 2020 the latest available data for €STR index in European central bank publications is as of 24 August 2020, hence the index calculated as the simple average of data in the period of 25 February 2020 to 24 August 2020 is equal to -0.5429, rounded to one decimal place. The primary reference rate, being equal to the calculated €STR index plus a 3% fixed margin, is set at 2.5%.

Secondary reference rate (is published for information purpose only). As per RBR review date the latest data available in European central bank publications for EONIA index is as of 21 August 2020, hence as of 25 August 2020 the index defined as the simple average of the data in the period of 20 February 2020 to 21 August 2020 is equal to -0.4578%, rounded to one decimal place. Therefore, the secondary reference rate, being equal to the sum of the calculated EONIA index and 3% fixed margin, is set at 2.5%. 

GBP RBR

The RBR for GBP has decreased to 3.1%

How we calculated this

As of 25 August 2020 according to publications from the Bank of England, the average SONIA index (GBP overnight index average) over the last 6 months’ available data in the period of 25 February 2020 to 21 August 2020 rounded to one decimal place is 0.1%, hence, the primary reference rate, calculated as the sum of SONIA and 3% fixed margin, is set at 3.1%. 

Taking into consideration, that as of the review date the difference between the effective RBR (3.7%) and the calculated reference rate exceeds 0.5 percentage point, the value of the RBR is matched to the GBP primary reference rate and set at 3.1% for the next period.

 

Reference rate explanatory note

Primary reference rate. As per RBR review on 25 August 2020, the latest available data for SONIA index in Bank of England publications is as of 21 August 2020. Hence as of the review date the index calculated as the simple average of data for the period of 25 February 2020 to 21 August 2020 is equal to 0.1289%, rounded to one decimal place. The primary reference rate, being equal to the calculated SONIA index plus 3% fixed margin, is setup 3.1%.

Secondary reference rate (is published for information purpose only). Within the RBR review period from 25 February 2020 to 25 August 2020 the Bank of England base rate was equal to 0.75% for 25 February 2020 to 10 March 2020 observation period, 0.25% during 11 March 2020 to 18 March 2020 period and 0.1% during 19 March 2020 to 25 August 2020 period, hence, the secondary reference rate, calculated as the simple average of latest available six months’ daily observation data, rounded to one decimal place, plus 3% fixed margin as of 25 August 2020 is setup 3.2%.

 


If you have any questions please call us on +374 60 655 000 or visit any HSBC Bank Armenia branch.