Armenian Citizens to Be Prohibited from Obtaining Loans in Dollars and Euros: New Bill Discussed by the CPP

A bill authored by Gevorg Papoyan, Arusyak Manavazyan, and Narek Grigoryan regarding amendments to the law on "Currency Regulation and Currency Control" was discussed today at the ongoing session of the National Assembly's Standing Committee on Financial-Credit and Budgetary Issues.

According to the proposal that has passed through parliament's agenda, Armenian banks will only be allowed to grant foreign currency loans to foreign citizens. The Civil Contract (CP) faction of the National Assembly is proposing to prohibit Armenian citizens from taking loans in dollars, euros, or other foreign currencies from Armenian banks and credit organizations.

“People’s incomes are absolutely in local currency; however, individuals are making risky investments in euros. For example, when the exchange rate was 400 AMD, citizens took out mortgage loans in euros, and now they are paying at a rate of 430-440 AMD. Imagine that tomorrow it could reach 700 AMD, as the euro rate has significant fluctuations over time, and it may turn out that the person is paying not 4-5 percent but 50-60 percent because of such large fluctuations,” stated Papoyan.

According to him, such situations also lead to risks regarding loan repayments. Based on official statistics presented by the deputy, "non-performing" loans (those that are unpaid) constitute 1 percent of loans in local currency, while in foreign currency loans, this figure is around 5-6 percent.

At the end of the discussion, the committee provided a positive conclusion for the legislative proposal put forth by the CPP deputies. The draft will soon be presented for parliamentary review. Gevorg Papoyan, the chairman of the Standing Committee on Financial-Credit and Budgetary Issues, informed that Armenian banks have not yet submitted any proposals or complaints regarding the bill.