Friday, December 12 2014 16:29
During the current week Central Bank of Armenia sold USD 30mln in course of daily interventions and slightly slowed down devaluation of Armenian dram
ArmInfo. During the current week (on December 8-12), the Central Bank of Armenia (CBA) sold USD 30mln to the participating banks in the course of daily interventions in the interbank currency market - USD 6mln daily. The CBA press service has told ArmInfo that over this period the average exchange rate rose from 456.63 to 470.22 AMD/$1 and the cut-off price grew from 455 to 469.76 AMD/1 USD.
According to the CBA's statement dated 8 December 2014, on 8 December, the Central Bank of Armenia launched daily interventions to restore the balance in the exchange market and the soften currency fluctuations. The interventions will last till the end of 2014. The CBA will continue announcing the ceiling of daily sale amounts till the end of the year to normalize the situation in the exchange market of Armenia. According to the source, the CB will be publishing foreign exchange operations to ensure transparency in the financial market of Armenia. The daily intervention amounts will be reduced gradually until the national currency exchange rate is balanced. In particular, during the first week (8- 12 December) the daily interventions will be $6 mln. Afterwards, the daily interventions will gradually be reduced depending on demand and will be brought to zero by the end of the year.
Chairman of the CBA Artur Javadyan has recently told journalists that these short-term daily interventions are not a deviation from the floating rate policy. "They are much smaller than the market, so, we are not planning to shape the rate," Javadyan said. He said that the CBA's interventions are supposed to stabilize the rate. Javadyan gave the key factors that caused AMD's drop: economic growth in the United States and no more quantitative easing by the Federal Reserve System. "This resulted in anticipation of higher interest rates and outflow of capital from developed countries to the US. As a result, developed countries registered slowdown in their economies growths and drop in their currencies. I mean the EU, Switzerland, China, Brazil, the UK, Japan and India," Javadyan said. He added that along with the given impact on the CIS, the situation has deteriorated due to the regional geopolitical problems and reduction in oil prices. These factors have resulted in sharp reduction of economic growth rates in Russia and the ruble devaluation, which has increased the pressure on the CIS countries in terms of export and money transfers by reducing the inflow of US dollars.
As of December 12, the AMD devaluation against USD is still going on in the retail currency market of Armenia, but has already slowed down due to the CBA's daily interventions. Over15% devaluation has been fixed since October. At the moment, the exchange rates at swap bodies are as follows: 464/469 AMD/1 USD, 571/588 AMD/1 EUR, 8.1/8.75 AMD/1 RUR. The optimal rates at the banks of Armenia were as follows: USD was purchased for 464 AMD (ceiling), EUR - 576 AMD, RUR - 8.16 AMD. The lowest rates of sale were as follows: 467 AMD/1 USD, 582 AMD/1 EUR, 8.42 AMD/1 RUR. At NASDAQ OMX Armenia, from June through December 11, foreign exchange operations amounted to $396.6 million drams with the exchange rate growing from 407.14 to 461 AMD/1 USD. Almost no transactions were registered after December 1 (only 100 thsd USD on Dec 10). The transactions in November alone totaled nearly $117 million drams. Last week (1-5 Dec), interbank market of foreign exchange operations registered a record-breaking indicator - $59.3 million, which resulted in a 442.42 AMD/1USD exchange rate. In this light, the stock exchange started the week with transactions in the amount of $3.5 million (1 Dec) with no deals for the following days.
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