As Central Bank makes intervention in the inter-bank forex market, devaluation of Armenian dram stops

ArmInfo.  During the current week, the devaluation of the Armenian dram has intensified. The stock exchange was idling like during the last week.  The interbank forex market alone with its small transactions, amid the passive stock exchange, failed to prevent the Armenian dram from depreciation). On Friday, the intervention of the Central Bank ($29.6 mln) stopped the devaluation of the national currency.  Thus, on November 9-13, no forex transactions were registered on NASDAQ OMX Armenia, while the interbank forex market saw a 3.5-fold growth (inclusive the CB's intervention). As a result, the Dram appreciated in the first week of Nov from 473AMD/1USD to 478AMD/1USD, reaching 483AMD/1USD as of Nov 13. 

According to the CBA press office, on November 9-13, no transactions were registered on NASDAQ OMX Armenia The transactions on the forex interbank market within the week under review totaled $19.61 mln, forming the exchange rate at the level of 482.64 AMD/1USD. The Central Bank probably made an intervention, given the big transactions this week (Friday). The latest large intervention of the Central Bank was on Oct 2 - supposedly $6 million, on Sept 19 - $22.2mln, and on August 28 - $95 mln.

The source says that on November 9-13, on the intrabank currency market (transactions with customers) the banks bought $66.5 mln (6% decline versus the previous week) at the average exchange rate of 479.98 AMD/$1, and sold $73.7 mln (12% decline) at the average exchange rate of 482.61 AMD/$1. In the meantime, the banks bought 4.4 mln EUR (up 25%) at the average exchange rate of 515.11 AMD/1EUR, and sold 13mln EUR (down 23%) at the exchange rate of 519.99 AMD/1EUR.  The banks also bought 905.5 mln RUR (8% growth) at the average exchange rate of 7.37 AMD/1RUR and sold 365 mln RUR (28.1% growth) at the exchange rate of 7.53 AMD/1RUR.

During the previous week (November 2-8) the Armenian banks provided AMD loans worth 40.8 bln AMD and USD loans worth $27.4 mln. As compared with the previous week (October 26-Nov 1), AMD loans increased by 17% and the ones in terms of USD fell by 54.3%.  

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/$1 by Dec 27. In 2014, in the retail forex market of Armenia, the AMD depreciated against USD by 40%, with the maximum indicator (570 AMD) fixed on Dec 17 and the minimum (406 AMD) registered in July. In the course of the 9 months of 2015, in the retail forex market AMD appreciated from 477 to 473 against USD; from 571.5 to 532 against EUR, at the same time depreciating from 8.2 to 7.2 against RUR. In October, the average USD/AMD exchange rate was floating.  On October 30, it made up 473 AMD/1$. The national currency appreciated against EUR (520 AMD/1EUR) and appreciated against RUR (7.5 AMD/1RUR). In November the Armenian dram started showing signs of devaluation again, depreciating against USD (478 AMD/$1), EUR (520 AMD/1EUR) and RUR (7.3 AMD/1RUR) as of Nov 13.