Tuesday, March 16 2010 17:05
For de-dollarization purposes Central Bank of Armenia has stiffened the standard of compulsory provisioning of borrowed foreign exchange funds that comes into force on 14 Apr 2010
ArmInfo. For de-dollarization purposes the Central Bank of Armenia has stiffened the standard of compulsory provisioning of borrowed foreign exchange funds that comes into force on 14 Apr 2010. In particular, the acting standard of the minimal amount of compulsory provisioning of the foreign exchange funds placed in the CBA by the commercial banks, which now makes up 12% of the borrowed funds, will be partially ensured in AMD: 3% in AMD and 9% in foreign exchange starting April 14. To recall, the acting standard of the minimal amount of compulsory provisioning of AMD funds placed in CBA, which currently makes up 8% of the borrowed funds, has undergone no
changes.
The CBA press-service told ArmInfo that the given amendment and alteration was introduced in Provision 2 "On regulation of activity of banks and basic economic standards of banking activity" at today's sitting of the CBA Board under the chairmanship of CBA Head Artur Javadyan. At the same sitting amendments and alterations were introduced in the order and terms of issue and publication of CBA reviews, as well as in the Regulations of the CBA Center for Financial Monitoring.
Earlier Vahe Vardanyan, Head of the CBA Department for Financial Policy and Financial Stability, said it was envisaged to restore the standard on currency management starting April 26. Then it is planned to stiffen the standard of capital adequacy: the acting 12% standard of capital provisioning to cover the possible losses on 100% risky loans will be increased to 18%. Another change directly connected with the assets concerns the requirements to reserves of possible losses, particularly, the CBA and the Finance Ministry are jointly changing the order of classification of assets, which needs more time. "We hope that as a result of the measures to be taken, the 50%:50% ratio of foreign exchange and AMD loans, and 70%:30% ratio of foreign exchange and AMD deposits will change for the better. In particular, the share of foreign exchange deposits will decline to 65%, and AMD deposits will rise to 35%. The CBA hopes that foreign exchange deposit loans will decline by 2 pct points at least, as the banks will be striving to this, taking into account the expenditures",- said Vardanyan. For his part, Head of the CBA Department for Monetary Policy Artur Stepanyan does not rule out certain growth in AMD deposits and decline in foreign exchange loans.
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