ArmInfo. Risk premiums in Armenia's banking sector have significantly decreased. This was announced by Martin Galstyan, Chairman of the Central Bank of Armenia, from the podium of the National Assembly of the Republic of Armenia on May 5.
He explained that the risk premium refers to the difference between the rates on Eurobonds and government treasury bonds. These risks have now decreased from the previous 400 basis points to 190. Furthermore, yields on T-Bills have also significantly decreased. Today, yields on government bonds have fallen from 10% to 8%. Moreover, investors in our T-Bills include not only our banks and organizations, but also reputable international companies such as Barclays, Morgan Stanley, and others, which purchase Armenian T-Bills denominated in the national currency. Today, as Galstyan noted, international institutional investors hold approximately 10% of all bonds issued in the country.
The Central Bank Chairman also reported that over 1 trillion drams have currently accumulated in the country's pension funds. Last year, an important decision was made to direct 10% of these funds to the real sector of the economy. Part of the Firebird project to build an AI plant in the country is being financed by two pension funds operating in the country.
Speaking about capital market development, the chief banker emphasized the need to first establish a corporate bond market, followed by the development of the stock market. But most importantly, Galstyan pointed out, is the lack of promising projects. Commercial banks and pension funds are well capitalized, but the absence or insufficient number of projects leads to a paradoxical situation where there is money, but nowhere to invest it.
