The Central Bank of Armenia (CBA) has decided to increase the countercyclical capital buffer (CCB) from the current 1.75% to 2% of risk-weighted assets, effective February 1, 2027. This decision was made by the CBA Council on July 28, 2023, based on a comprehensive analysis of the macro-financial and credit market developments.
The analysis indicated that the financial cycle index has increased compared to the previous quarter, primarily due to high activity in lending and the real estate market. The ratio of loans to GDP in the first quarter of 2026 rose to 84%, compared to nearly 77.2% a year earlier.
The CBA also noted that the credit portfolio continues to grow at high annual rates, with significant activity observed across almost all lending sectors.
This decision aims to ensure the stability of the banking sector and to mitigate potential systemic risks.
