Armenian Dram keeps depreciating

ArmInfo. On Dec 5-9,  transaction on the forex interbank market of Armenia fell by 63%,  following 21% growth week before. In the meantime, the purchase and  sale of USD and EUR demonstrated different dynamics amid the retained  interest in RUR operations.

As a result, during the current week AMD  kept depreciating against USD from 480.5 to 484.5 AMD/$1; against EUR  from 513 to 514 AMD/1EUR; and against RUR from 7.6 to 7.7 AMD/1RUR.  Earlier, 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 to 476 AMD/USD1, revaluated against EUR to 521 AMD/1EUR,  while the AMD/RUR exchange rate remained unchanged - 7.5 AMD/1RUR.  This tendency continued in November. 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-Sept 2016, the Central Bank bought USD on the  foreign exchange market in April (USD2.4 mln), June (USD50.2 mln),  August ($19.8 mln), and September (USD28.8mln), 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 Dec 5-9 the forex interbank market reduced the amount of daily  transactions, with the biggest amount registered on Thursday - $1.9  mln and the smallest amount on Friday - $75.7 thsd. The total amount  of the transactions on the forex interbank market during the current  week amounted $4.459 mln (versus $11.950 mln a week before), and the  average exchange rate was 482.37 AMD/$1 (versus 481.29 a week  before). At the same time, on the intrabank market USD purchase  dropped by 19%, while EUR purchase grew by 1%. USD sales rose by 5%,  and EUR sales fell by 10%. RUR purchase rose by 25%, and RUR sales  grew by 24%. As a result, the purchase totaled $66.6 mln at the  average exchange rate of 481.34 AMD/$1, 7.7 mln EUR at 513.86  AMD/1EUR, and 1.3 bln RUR at 7.53 AMD/1RUR. The sales amounted to  $82.7 mln at the average rate of 482.71 AMD/$1, 10.5 mln EUR at  518.34 AMD/1EUR, and 775.9 mln RUR at 7.61 AMD/1RUR.

According to the source, during the previous week (November  28-December 3), the Armenian banks provided AMD loans worth 47.6 bln  AMD and USD loans worth $56.8 mln. The amount of AMD loans fell by  34% and the amount of USD loans rose more than 2-fold. 

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 early December AMD  continued depreciating against USD and weakened its positions against  EUR and RUR.