National dram devaluating slowly amid active transactions on inter-bank market

ArmInfo. On October 10-14, the amount of transactions on the interbank forex market of Armenia fell 9% after last week's 60.7% growth. At the same time, on the intrabank market the operations in terms of EUR demonstrated downward dynamics, the purchase and sale of USD demonstrated different trend, while purchase and sale of RUR grew.  Thus, in the first half of October 2016, AMD depreciated against USD from 474 to 477 AMD/$1, against RUR from 7.5 to 7.6 AMD/1RUR appreciating against EUR from 532 to 527 AMD/1EUR. In overall, in Jan-Sept 2016, AMD appreciated against USD from 482 to 474 AMD/$1, depreciating against EUR from 529 to 532 AMD/1EUR, and against RUR from 6.9 to 7.5 AMD/1RUR. In September alone, AMD revaluated against USD from 475 to 474 AMD/$1. 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 the press office of the Central Bank of Armenia has told ArmInfo, on October 10-14 the interbank forex market increased the daily amounts of its transactions, with the largest amount registered on Thursday - $8.1 mln and the smallest amount was on Tuesday - $1.450 thsd. The total amount of transactions on the interbank forex market for Oct 10-14 fell by 8.9% to $16.350 mln (versus the previous $17.950 mln), forming the average exchange rate at 476.92 AMD/$1 (versus the previous 474.91 AMD/1USD). In the meantime, on the intrabank forex market USD purchase grew by 20% (versus 2% drop a week before), while EUR purchase increased by 28% (versus 4.1% decline a week before), USD sales decreased by 14% (versus 19% rise a week before) and EUR sales increased by 057% (versus 0.9% fall a week before). At the same time downward dynamics of RUR transactions was registered on the intrabank forex market: RUR purchase decreased 18% after 1.6% growth a week before, while RUR sales fell 33% after by 30% growth a week before. As a result, USD purchase made up $87.1 mln at the average exchange rate of 474.86 AMD/$1, EUR purchase - 9.14 mln EUR at 528.41 AMD/1EUR, and RUR purchase 1.05 bln RUR at 7.56 AMD/1RUR, whereas USD sales amounted to $80.98 mln at 476.60 AMD/$1, EUR sales - 18.2 mln EUR at 528.56 AMD/1EUR, and RUR sales - 384.3 mln RUR at 7.67 AMD/1RUR.

According to the source, during the previous week (October 3-8), the Armenian banks provided AMD loans worth 42.7 bln AMD and USD loans worth 48.7 mln. The weekly dynamics of both AMD and USD loans was downward.  Particularly, amount of provided AMD loans fell by 8.6% from 46.9%, while amount of USD loans suffered insignificant decline after 27.7% growth a week earlier.

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 482AMD/$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 30, AMD appreciated against USD and EUR to 474 AMD/$1 and 532 AMD/1EUR, respectively. Along with it, AMD depreciated against RUR to 7.5 AMD/1RUR. In the first half of October (10-15) AMD devaluated against USD (to 477 AMD/$1 from 4744 AMD/$) and RUR (to 7.6 AMD/1RUR from 7.5 AMD/1RUR) and revaluated against EUR to 527 AMD/1EUR from 532 AMD/1EUR.