Armenian Dram keeps depreciating

ArmInfo. On November  28-December 2, the transactions on the interbank forex market grew by  21% after 8.1% decline last week. On the intrabank market the USD and  Ruble transactions activated, and interest in EUR purchase appeared  amid continuing decline of EUR sales, while a week before the  operations with the abovementioned currencies declined.  As a result,  within the current week AMD kept depreciating against USD from 479.5  to 480.5 AMD/$1 and depreciating against EUR from 506 to 513 AMD/1EUR  and RUR to 7.6 AMD/1 RUR from 7.4 AMD/1RUR. In overall, in Jan- Sept  2016, AMD appreciated against USD from 482 to 474 AMD/USD1,  depreciating against EUR from 529 to 532 AMD/1EUR, and against RUR  from 6.9 to 7.5 AMD/1RUR. In October AMD devaluated against USD from  to 476 AMD/USD1, revalued against EUR to 521 AMD/1EUR, while AMD/RUR  rate remained unchanged-7.5 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:  USD100 thousand in  March, USD2.950 mln in April and USD800 thousand in May, after which  it was passive. In Jan-Aug 2016, Central Bank bought USD on the  foreign exchange market in April (USD2.4 mln), June (USD50.2 mln) and  August  ($19.8 mln) and sold in January and February (USD53.1 mln and  USD 41.5mln, respectively).

The press office of the Central Bank of Armenia has told ArmInfo that  on November 28- December 2 on the interbank forex market the maximum  amount of transactions was fixed on Thursday ($7.1 mln) and the  minimum amount was registered on Friday ($400 thsd). The total amount  of transactions on the interbank forex market was $ 11.950 mln(versus  $9.880 mln a week before), and the average exchange rate was  481.29AMD/$1 (versus 479.48 AMD/1USD a week before). In the meantime,  on the intrabank market the USD purchase transactions grew by 23%  versus 14% decline a week ago and EUR purchase also registered growth  by 10% versus 39% decline. USD sales increased by 16% versus 8% drop  a week ago, while EUR sales kept falling by 33% versus the previous  week's 8%. At the same time significant improvement of RUR operations  was registered: RUR purchase grew by 22% versus 9% decline last week,  and RUR sales registered 99% growth versus previous week's decline by  37%. As a result, the USD purchase totaled $83.4 mln at the average  exchange rate of 479.44 AMD/$1, EUR purchase - 7.6 mln EUR at 507.57  AMD/1EUR, and RUR purchase - 1.1 bln RUR at 7.41 AMD/1RUR.   Meanwhile, USD sales amounted to $79.3 mln at 480.96 AMD/$1, EUR  sales - 11.7 mln EUR at 512.56 AMD/1EUR, and RUR sales - 627 mln RUR  at 7.50 AMD/1RUR.

According to the source, during the previous week (November  21-November 26), the Armenian banks provided AMD loans worth 71.8 bln  AMD and USD loans worth $25 mln. The amount of AMD loans grew by 33%  and the amount of USD loans declined by 60%, while a week before  almost equal growth was registered: AMD loans by 21% and US by 26%.

To recall, in 2015, on the retail foreign exchange market of Armenia  AMD weakened against USD from 477 to 482 AMD/USD1 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/USD1, however since March it strengthened and stood  at 482 AMD/1USD by March 25. In overall in H1 2016 AMD appreciated to  477 AMD/USD1 from 482 AMD/USD1, devaluating in mid Feb (to 496  AMD/USD1 from 482AMD/USD1 on Feb 12), in the first decade of April  (to 484.5AMD/USD1 from 479 AMD/USD1), in mid May (to 480.5 AMD/USD1  from 479 AMD/USD1-on May 12), in the early and late June (to 479  AMD/USD1 from 478 on June 3 and to 477 AMD/USD1 from 476 AMD/USD1 on  June 30). In July AMD appreciated to 476 AMD/USD1 only in the  beginning of the third decade, after which it stood at the initial  level of 477 AMD/USD1. In August, AMD demonstrated revaluation - 475  AMD/USD1 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/USD1 and 532  AMD/1EUR, respectively. Along with it, AMD depreciated against RUR to  7.5 AMD/1RUR. In October AMD devaluated against USD to 476 AMD/1USD,  revaluated against EUR to 521 AMD/1EUR, while the AMD/RUR exchange  rate remained unchanged - 7.5 AMD/1RUR. This trend continued in  November. By November 30, AMD depreciated against USD to 480.5  AMD/$1, at the same time appreciating against EUR to 511 AMD/1EUR and  appreciating against RUR at 7.4 AMD/1RUR. Since December AMD  continued depreciating against USD and weakened its positions against  EUR and RUR.