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Bank Base Rate

Bank Base Rate

Currency Rate
AMD 10.00%
USD
9.25%
EUR
8.00%

Bank Base Rate

Currency AMD
Rate 10.00%
Currency USD
Rate 9.25%
Currency EUR
Rate 8.00%

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 13 September2022 the Board of the Central Bank of Armenia made a decision to increase the refinancing rate by 0.5 percentage points, setting it at 10%.

Thus, the cumulative increase of the refinancing rate since the AMD Base rate last review done on 28 March 2022 has totaled to 2 percentage points, which, is a trigger for AMD Base rate review.

Simultaneously, conducted market research results reveal that the continuous increase of refinancing rate throughout 2022 has resulted in interest rate increase in the market. 

Aiming to respond to refinancing rate increase, which is mostly driven by inflationary pressures in the market, the Bank has decided to increase the value of refinancing rate component of AMD Base rate and set it at 10.0%.  At the same time, taking into account that market interest rate increase isn’t in line with refinancing rate increase, it was decided to decrease the fixed margin component value to 0%. Thus, as a result of the Base rate component review, the AMD Base rate has been increased by 0.5 percentage points from 9.5% to 10.0%.

AMD Base rate review date 31 October, 2022. 

Effective date 15 December, 2022.

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 27 March, 2018

Effective 01 May, 2018

Explanatory Note on USD Base Rate change

On 27 March 2018, after detailed analysis of the market "HSBC Bank Armenia" CJSC has made a decision to review USD Base Rate and decrease it by 50 basis points from 9.75% to 9.25% effective from 01 May, 2018. This decision is based on the following factors:

Decreasing tendency in USD interest rates in the Armenian market mainly driven by significant excess of USD liquidity.

Reduced mandatory reserve requirements by Central Bank of Armenia against funds attracted in foreign currency (from 20% to 18%) and stability at that level.

Forward looking outlook of Long-Term Foreign and Local-Currency Issuer Default Ratings set by international Rating agencies for Armenia has been changed from "stable" to "positive", which is expected to have downward influence on borrowing costs.

EUR Base Rate (not 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 18 March 2015

Effective 02 May 2015

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 10.00% and the fixed margin is 0%;

USD Base Rate - 9.25%, where US Federal Funds Target Rate (rate announced by the US Federal Reserve - Central Bank of the United States of America) is 1.50% and the fixed margin is 7.75%;

EUR Base Rate - 8.00%, where the Main Refinancing Operations Fixed Rate announced by the European Central Bank (ECB Main Refinancing Operations Fixed Rate) is 0.05% and the fixed margin is 7.95%.

Last updated on: 15.12.22, 06:16

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