Dram keeps appreciating

ArmInfo. The amount of transactions on the interbank forex market of Armenia keeps declining for the second week in a raw, at the background of which downward dynamics of interbank transactions has sharply changed to upward one, as a result dram started to revaluate. Thus, AMD appreciated against USD to 474 AMD/$1, against EUR to 532 AMD/1EUR and against RUR to 7.3 AMD/1RUR.

Since the beginning of the year the foreign exchange market showed signs of life rarely making one at a time transaction between March and May:  $100 thousand in March, $2.950 mln in April and $800 thousand in May, after which it was passive. In H1, Central Bank bought USD on the foreign exchange market in June ($50.2 mln) and April ($2.4 mln) and sold in January and February ($53.1 mln and $41.5mln, respectively).  As a result, in Jan-Aug 2016, AMD appreciated against USD from 482 to 475 AMD/$1, depreciating against EUR from 529 to 530 AMD/1EUR, and against RUR from 6.9 to 7.3 AMD/1RUR. In the first decade of September, AMD has retained its positions against USD and then started to appreciate.

The press office of the Central Bank of Armenia has told ArmInfo that on Sept 12-16 the daily transactions on the interbank forex market dropped. The biggest amount of the transactions was fixed on Tuesday - $1.9 mln and the smallest one was registered on Monday - $1.1 mln. The total amount on the interbank forex market during the specified period declined by 24% and was $4.5 mln (versus $5.9 mln a week before with 60% drop), with the average exchange rate being 474.35 AMD/$1 (versus the previous 474.91). In the meantime, on the intrabank market USD purchase grew by 11.4% on Sept 12-16 (versus 13% drop a week before); EUR sales also grew by 28.8% (versus 14.3% decline a week before). USD sales dropped by 6.3% (versus 9% drop a week before) over the reported week and EUR purchase grew by 16% (versus 1.7% decline a week before). At the same time diverse dynamics of transactions with RUR changed to significant growth: purchase grew by 45.5% (versus 2.8% growth a week before), while RUR sales grew by 19.5% (versus 0.1% decline a week before). As a result, $74.8 mln was bought at the average exchange rate 473.24 AMD/$1, 7.6 mln EUR - at 529.80 AMD/1EUR and 1.6 bln RUR - at 7.27 AMD/1RUR. At the same time, $73.9 mln was sold at the average exchange rate of 474.81 AMD/$1, 13.7 mln EUR - at 534.01 AMD/1EUR and 563.8 mln RUR - 7.37 AMD/1RUR.

According to the source during the previous week (September 5-September 10), the Armenian banks provided AMD loans worth 41.9 bln AMD and USD loans worth $36.8 mln.  As compared with the previous week, drop of USD loans accelerated sharply by 25.8% amid 4.5% rise of the ones in terms of AMD. A week before the dynamics was as follows: AMD loans grew by 7.2%, while the ones in terms of USD declined by 7.6%. 

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 to 496AMD/$1, however since March it strengthened and stood at 482 AMD/1USD by March 25. In overall in H1 2016 AMD appreciated to 477 AMD/$1 from 482 AMD/$1, devaluating in mid Feb (to 496 AMD/$1 from 479AMD/$1 on Feb 12), in the first decade of April (to 484.5AMD/$1 from 479 AMD/$1), in mid May (to 480.5 AMD/$1 from 479 AMD/$1-on May 12), in the early and late June (to 479 AMD/$1 from 478 on June 3 and to 477 AMD/$1 from 476 AMD/$1 on June 30). In July AMD appreciated to 476 AMD/$1 only in the beginning of the third decade, after which it stood at the initial level of 477 AMD/$1.  In August, AMD demonstrated revaluation -475 AMD/$1 by August 31 and stood at this level in the first ten days of September, after which it further revaluated.  Thus, by September 16 AMD revaluated against USD to 474 AMD/$1, against EUR to 532 AMD/1EUR and against RUR to 7.3 AMD/1RUR.