Friday, December 26 2014 16:12
Armenia's Central Bank raises rate of refinancing but lowers reserve ratio and Lombard repo rate
ArmInfo. Following the Dec 23 raise in the rating of refinancing from 6.75% to 8.5%, Armenia's Central Bank has lowered the forex reserve ratio from 24% to 20% and the Lombard repo rate from 21% to 20%.
Together with the Government, the CB is monitoring the prices and is taking measures to stabilize the situation that followed the slump in AMD and caused a jump in prices.
Considering the global economic situation, the CB is committed to do its best to ensure financial stability in Armenia.
To note, 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 were $6 mln. Afterwards, the daily interventions were gradually reduced to 4 mln USD and then 2 mln USD and they will be brought to zero by the end of the year. Along with this, on Dec 17, the CB toughened the forex reserve ratio from 12% to 24%, and the banks place the "reserve" funds at the CB entirely in terms of Armenian dram. On Dec 3, the CB raised the Lombard repo rates from 10.25 to 21%. On Dec 23, the CB raised the refinancing rate from 6.75 to 8.5%.
From Oct through Dec 17 AMD dropped against USD by 45%, Dec 18-20 it grew by 25%. On Dec 22 it started dropping again. On Dec 25, at 4:30 pm, the rate was 463 AMD against 1 USD, 568.5 AMD against 1 EUR, 9.1 AMD against RUR. On Dec 20 the rates were 455 AMD, 555 AMD and 7.8 AMD, respectively, versus 570 AMD, 712 AMD and 8.6 AMD, respectively, on Dec 17. At NASDAQ OMX Armenia, from June through December 25, foreign exchange operations amounted to $406.2 million drams with the exchange rate growing from 407.14 to 560 AMD/1 USD, then dropping to 442.44 AMD/1USD and rising to 460.34 AMD/1USD on Dec 25. The transactions in November alone totaled nearly $117 million drams. On 1-5 Dec, interbank market of foreign exchange operations registered a record-breaking indicator - $59.3 million.
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