Monday, October 27 2014 16:45
Armenia's international reserves dropped by 31.6% to $1.7 billion by 1 October 2014
ArmInfo. In Q3 2014 versus Q3 2013, Armenia's gold and foreign exchange reserves dropped by 31.6% to $1.7 billion. The press service of the Central Bank of Armenia (CBA) has told ArmInfo that the decline versus Q2 2014 made up 6.8%.
The CBA explains that in 2014, as expected, the decline of the international reserves was provoked by reduction in the big balances of call accounts of commercial banks (worth $300 mln), as well as by foreign debt servicing expenses (worth $250 million).
The CBA says that in late Q3 2014 international reserves ensured 4.2-month import coverage (versus 5.4- month coverage in 2013 and 4.5-month in 2012. The coverage of the short-term debt (up to 1 year) by international reserves made up 4.4 months versus 5.4 months in 2013 and 7 months in 2012. The ratio of international reserves against the monetary stock was 0.8 versus 1.1 in 2013 and 1 in 2012. In the dynamics of these reserves, the CBA sees no reasons to worry and it believes that the international reserves in Armenia are more than enough. The CBA recalls that the traditional criteria for evaluation of the reserves are as follows: ensuring 3-month import coverage; ensuring short-term (up to 1 year) debt servicing; and the ratio against the monetary aggregates (preferably 0.2).
Like a comparison, Central Bank has pointed at the fact that international reserves grew much in 2013, thanks to the grants and credits, equal to $270 million, received over that period of time. Moreover, in the 3Q 2013 placement of the first Armenian eurobonds made it possible to attract about $690 million. As a result, at the end of the 3Q 2013 international reserves amounted to $2.431 billion. Later, in the 4Q 2013, the debt to Russia - $500 million was paid off (a stabilizing credit attracted in 2009), the falling effect of which upon the international reserves was neutralized by the December unprecedented growth of balances at the call accounts in Armenia's Central Bank. Such a growth was conditioned by the low profitability at the world market and outflow of funds from foreign banks in the high uncertainty conditions. These funds are a part of international reserves. So, these funds grew by almost $350 million in 2013, whereas Armenia's Central Bank bought about $72 million at the interbank market, as a result of which international reserves of Armenia amounted to $2,252 billion at the end of 2013.
To note, the share of the banking gold in the gross international reserves of Armenia was zeroed in December 2003. In 2013 international reserves of Armenia grew by 25% up to $2.252 billion. In 2012 international reserves of Armenia fell by 7% - to $1.799 billion, In 2011 international reserves of Armenia amounted to $1.932 billion (growth by 3,6% versus 2010)). And in 2010 international reserves of Armenia amounted to $1.866 billion.
