Active transactions on forex interbank market of Armenia retain AMD/USD exchange rate at 478 AMD/1USD

ArmInfo. The active transactions on the forex interbank market of Armenia retained the AMD/USD exchange rate at 478 AMD/1USD on May 23-27. As compared with the previous week, the amount of transactions on the forex interbank market dropped by 22.3% from $7.4 mln to $5.750 mln over the current week. This week Nasdaq OMX Armenia has seen no transactions.

It is noteworthy that the Central Bank of Armenia keeps abstaining from interventions. As a result, in Q1 2016, AMD devaluated against USD to 496 AMD/$1 (February 12) and then stood at initial 482 AMD/$1 on March 25. By April 2, AMD appreciated against USD to 480.5 AMD/$1, and then started depreciating again to 484.5 AMD/$1 by April 8. By April 15 AMD revaluated to 481 AMD/$1 with following strengthening to 479 AMD/$1 by April 29. This level was retained through May 11, but on May 12 it rose to 480.5 AMD/$1. However, on May 20, it dropped to 478 AMD/$1 and this level was retained throughout the following week. Independent experts say the AMD/USD exchange rate may rise to 540-550 AMD/$1 by late 2016, amid the financial and economic crisis in Russia and the sliding prices of oil and crude metals, which is one of the key export items of Armenia. The CBA press office has told ArmInfo that this week NASDAQ OMX Armenia has seen no transactions. At the same time the interbank forex market continues actively operating - on May 23-27 it secured $5.750 mln (22.3% drop versus the previous week) at the average exchange rate of 477.80 AMD/$1 (versus the previous 478.50). The maximum amount of the transactions was registered on Thursday (May 26) - $2 mln at the average exchange rate of 477.77 AMD/$1. The amount on Monday and Tuesday was also high - $1.5-1.6 mln.

The source says that on May 23-27, on the intra-bank currency market (transactions with customers) the banks bought $56.1 mln (12.5% decline versus the previous week) at the average exchange rate of 476.79 AMD/$1, and sold $63.2 mln (4.1% rise versus the previous week) at the average exchange rate of 478.55 AMD/$1. In the meantime, the banks bought 5.3 mln EUR (down 18.5%) at the average exchange rate of 532.84 AMD/1EUR, and sold 12.7 mln EUR (down 6.6%) at the exchange rate of 536.04 AMD/1EUR. The banks also bought 973.4 mln RUR (up 16.8%) at the average exchange rate of 7.19 AMD/1RUR and sold 394.8 mln RUR (down 1.1%) at the exchange rate of 7.27 AMD/1RUR.

During the previous week (May 16-21), the Armenian banks provided AMD loans worth 43.8 bln and USD loans worth $76.9 mln. As compared with the previous week (May 9-14), AMD loans grew by 34.4%, and the ones in terms of USD grew twofold.

To recall, in 2015, on the retail foreign exchange market of Armenia AMD weakened against USD from 477 to 482 AMD/$1 on average and strengthened against EUR from 571.5 to 529 AMD/1EUR and against Russian ruble from 8.2 to 6.9 AMD/1 RUR. Between December 14 and 28, the Central Bank made almost daily interventions. AMD depreciated amid decline of foreign trade turnover (by 20.6%), while import dropped more significantly (by 26.5%) than export (by 3.9%) as well as the decline in transfer inflow to Armenia more than by 30%, and this happened in conditions of low buying capacity of the population and low economic activity in the country. Since early 2016, AMD started depreciating again on the retail foreign exchange market of Armenia however since March it strengthened and stood at 482 AMD/1USD by March 25. At the same time AMD depreciated against EUR to 538 AMD/1EUR and against RUR to 7.1AMD/1RUR. Later, AMD started revaluating again since mid-April. By April 29, AMD depreciated against USD to 479 AMD/$1 and this trend continued in May. By May 27, AMD appreciated against USD to 478 AMD/$1, and against EUR to 535 AMD/1EUR, at the same time depreciating against RUR to 7.35 AMD/1RUR.