Monday, November 22 2010 20:30

ArmInfo. In conditions of the oligarchic system established in Armenia, the influence levers of the Central Bank of Armenia (CBA) on the economic policy are quite limited, ex- chairman of the CBA Bagrat Asatryan said at today's press conference dedicated to the Bankers' Day.

"There are several oligarchs in Armenia that have political levers via which they have managed to create their own financial system", he said and added that under such conditions the banking system of Armenia cannot be the main and key creditor for the real sector of economy or conduct an effective monetary policy. Nevertheless, the ex-head of the CBA said that as compared with other financial structures in Armenian economy, the banks have always been distinguished by their priority development.

Asatryan thinks that the factors limiting the full-fledged development of Armenia's banking system are also the high-level shadow economy, the policy being conducted by the economic authorities of the country, and the debt burden of the country. Asatryan pointed out that a flow of not so reliable capital to the banking system f Armenia has recently been observed.

In 1996 Armenia's banking system was dominated by European capital today it is dominated by Russian capital having just 15-year history. Meanwhile, the key feature of a stable banking system is stability of its capital.

Asatryan said that since the last year the Central Bank has fought inflation by means of currency interventions (as a result, this year the CB's foreign reserves has shrunk by $150mln from $2bln to $1.850bln) and money supply and monetary base. "By the end of this year we will have 10% inflation," Asatryan said.

Concerning the Government's monetary control policy, he said that AMD will have good future "in the arms of a good foreign exchange."

The last forecast of Asatryan was as follows: "This and next year we will live even worse than before."