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"Converse Bank" Flexible rate /CBFR/

Converse Bank flexible rate /CBFR/

CBFR is calculated by the following formula:

CBFR = Variable component + Fixed component

where:

The variable component - is set on the last working day of each month, taking as a basis the annual interest rates defined for deposits of the Bank’s "Progress" type deposited for a period of twelve months, per each currency, on the basis of which the average annual interest rates for the last three months are calculated.

The fixed component - is set, taking as a basis the changes of interest rates for term deposits and loans at the financial market of the Republic of Armenia and inside the Bank, the existing trends, the economic indices in the RA, based on the materials published by the Central Bank of the RA and the Statistical Service of the RA, in particular the developments in the tax and budget and monetary policy, as well as changes at international markets.

For current loan and/or other funding agreements calculated with CBFR, as well as for current deposit agreement the changed CBFR enters into force starting from the 1st day of the second month following the month of approval of the CBFR.

Converse Bank floating rate /CBFR/

In case of funding calculated by the CBFR, the interest rate of funding per currency is determined based on the following principle:

In case of funding calculated by the CBFR, the interest rate of funding per currency is determined based on the following principle:

AMD  CBFRDRGBYC + fixed interest rate /%/
USD  CBFRUSD LIBOR + fixed interest rate /%/
Euro  CBFREURO LIBOR + fixed interest rate /%/

Namely, if funding is provided:

  • In AMD, then

the annual nominal interest rate is determined by the interest rate of the yield curve of the RA discount rate government bonds (DRGBYC) with 180 days’ maturity, published by the Central Bank of Armenia at https://www.cba.am.

  • In USD or Euro, then

the annual nominal interest rate is determined by LIBOR for USD or Euro and “USD 6-month ICE LIBOR” or “Euro 6-month ICE LIBOR” benchmarks published by the Intercontinental Exchange (ICE) at https://www.theice.com are used accordingly.

At the same time, if the basic indicators of the currencies are not accessible to the Bank, the following secondary indicators are determined:

  • In case of AMD, the refinancing rate set by the CBA, and the refinancing rate is defined as:

CBFRCBA REFIN. % + fixed interest rate /%/

  • In case of USD, the Federal funds’ interest rate set by the US Federal Reserve Bank or the upper threshold of the range, and the refinancing rate is defined as:

CBFRFED FUND % + fixed interest rate /%/

  • In case of Euro, the interest rate for Marginal lending facility set by the European Central Bank, and the refinancing rate is defined as:

CBFRMarginal lending facility % + fixed interest rate /%/

In case of inaccessibility of the basic indicators and use of secondary indicators, the nominal interest rates of funding with CBFR determined on the basis of secondary indicators are set so that the nominal interest rate remains unchanged under conditions of change in the fixed component of the interest rate of funding.

The set basic and secondary CBFR indicators are published on the Bank’s official website and are available in the Bank’s premises.

The CBFR is calculated twice a year, on August 15 and February 15. If any of these dates is a non-working day, then the CBFR is calculated on the following working day based on the values of the above-mentioned indicators underlying calculation of the CBFR as of August 15 and February 15 respectively. But, if necessary, for example, if the interest rate for USD and Euro 6-month LIBOR changes by 1 percentage point and more after the latest approval of the CBFR, and the interest rate of the yield curve of the discount rate government bonds changes by 2 percentage points and more after the latest approval of the CBFR, then calculations can be made at other times, but not more than twice a year.

Converse Bank floating rates

Calculated on the basis of the basic indicators
AMD 6.25%
USD 2.5%
Euro -0.3%

In case of inaccessibility of the basic indicators, secondary indicators are taken as a basis:

  •  AMD 6%
  •  USD 1.75%
  •  Euro 0.25%

Archive



ISO (Code) Unit Rate Start Date End Date
AMD 1 11.00 01.09.2018 30.09.2018
USD 1 6.75 01.09.2018 30.09.2018
EUR 1 4.50 01.09.2018 30.09.2018