Large-scale intervention in interbank forex market by Armenian CB appreciates Armenian dram insignificantly

ArmInfo. The Armenian Central Bank's (CBA) tardy large-scale intervention (95 million USD) in the interbank forex market appreciated the Armenian dram (AMD) insignificantly. On August 24-28, the forex transactions on NASDAQ OMX Armenia grew 11-fold, which was 29 times as low as the transactions on the interbank forex market, which accelerated the growth rates from 52.1% to 13-fold over the week. The entire amount of interbank transactions fell on Friday, while NASDAQ OMX Armenia registered transactions on Thursday-Friday only. As a result, the AMD, which dropped from 474 to 478.3 against USD in July and rose to 479 by mid-August, jumped to 485.5 by August 24 and dropped to 484.3 on August 28 (following the intervention).

The press office of the CBA has told ArmInfo that on August 24-28 the transactions on NASDAQ OMX Armenia totaled $3.3 mln, forming an average exchange rate of 483.02 AMD/$1. The transactions registered on Thursday and Friday amounted to $100 thsd and $3.2 mln, respectively. In the interbank forex market only Friday was active.  It registered transactions worth $95 mln at the average exchange rate of 484.55 AMD/$1.

The source says that in the intrabank currency market (transactions with customers) the banks bought $64.5 mln on August 24-28 at the average exchange rate of 482.14 AMD/$1, and sold $144.3 mln (up 67% versus the previous week) at the average exchange rate of 485.88 AMD/$1. In the meantime, the banks bought 7.4 mln EUR (up 5.7%) at the average exchange rate of 548.82 AMD/1EUR, and sold 14.6 mln EUR (up 21.7%) at the exchange rate of 559.63 AMD/1EUR. The banks also bought 1.01 bln RUR (8% decline) at the average exchange rate of 6.96 AMD/1RUR and sold 460.3 mln RUR (53.3% rise) at the exchange rate of 7.13 AMD/1RUR. 

On 17-23 August 2015, Armenian banks provided AMD loans worth 38 bln AMD and USD loans worth $37 mln. As compared with the previous week (10-16 August), AMD and USD loans rose by 6.7% and 6.9%, respectively.

To recall, during the last months of 2014 the forex market of Armenia registered a sharp rise of the AMD/USD exchange rate - over 570 AMD/1USD. From October through December 17, 2014, AMD depreciated by almost 45% in the retail forex market of Armenia, then it appreciated by 25% on Dec 18-20, staring depreciating against on Dec 22. On Dec 27, the average AMD/USD exchange rate was 470 AMD/$1, the AMD/EUR exchange rate was 574 AMD/1EUR, the AMD/RUR exchange rate was 8.7 AMD/1RUR. Over 2014, NASDAQ OMX Armenia registered transactions worth a total of $744.5 mln, with the biggest amount falling on November ($117 mln). Over the year the exchange rate on NASDAQ OMX Armenia rose from 407.14 to 560 AMD/$1 (on Dec 17 the exchange rate rose by 22%), dropping to 470 AMD/$1 by Dec 27. In 2014, in the retail forex market of Armenia, the AMD depreciated against USD by 40%, with the maximum indicator (570 AMD) fixed on Dec 17 and the minimum (406 AMD) registered in July. In the first half of 2015, in the retail forex market AMD appreciated from 477 to 473 against USD; from 571.5 to 528 against EUR, at the same time depreciating from 8.2 to 8.6 against RUR. However, in july AMD starting depreciating and by 31 July 2015 the average AMD/USD exchange rate was 478.3 AMD/$1, with the AMD/EUR exchange rate being 524 AMD/1EUR and the AMD/RUR exchange rate being 8 AMD/1RUR. By August 24, AMD depreciated to 485.5 AMD/$1 against USD, insignificantly dropping by August 28 (following the CB intervention) to 484.3 AMD/$1. AMD depreciated to 544.5 against EUR and appreciated to 7.4 against RUR.