Saturday, June 4 2016 13:11
Svetlana Hovsepyan

Armenian dram certainly appreciates against Russian ruble following big transaction in rubles on inter- bank forex market

ArmInfo. Armenian dram appreciated against Russian ruble on June 3 - to 7.2AMD/1RUR - following a big transaction in rubles (22mln rubles) on the inter-bank forex market.  Active daily transactions in USD were held on the inter-bank forex market within the week, though the volume of those transactions fell 24.3% to $4.350mln as compared to the previous week. Due to this, the exchange rate was maintained at 478AMD/1USD.  No foreign exchange transactions were made. The Central Bank still refrains 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 30- June 3  the transactions totaled $4.350 mln (24.3% drop versus the previous week) 
at the average exchange rate of 478.61 AMD/$1 (versus the previous 477.80).  The amounts of the transactions were similar throughout the week (about $1 mln every day), but on Thursday and Friday besides USD transactions, there were also transactions in terms of EUR (June 2 - 
200,000 EUR) and in terms of RUR (on June 3 - 22 mln rubels). 
 
The source says that on May 30- June 3, on the intra-bank currency market (transactions with customers) the banks bought $65.5 mln (15.9% growth versus the previous week) at the average exchange rate of 476.91 AMD/$1, and sold $68.5 mln (8.4% rise versus the previous 
week) at the average exchange rate of 478.56 AMD/$1. In the meantime, the banks bought 10.5 mln EUR (two-fold growth) at the average exchange rate of 536 AMD/1EUR, and sold 10.7 mln EUR (down 15.7%) at the exchange rate of 536 AMD/1EUR. The banks also bought 861.9 mln RUR (down 11.4%) at the average exchange rate of 7.16 AMD/1RUR and sold 402.5 mln RUR (up 2%) at the exchange rate of 7.26 AMD/1RUR.
 
During the previous week (May 23-28), the Armenian banks provided AMD loans worth 37.8 bln and USD loans worth $42.5 mln. As compared with the previous week (May 16-21), AMD loans grew by 13.7%, 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 31, AMD appreciated against USD to 478 AMD/$1, and against EUR to 532 
AMD/1EUR, at the same time depreciating against RUR to 7.3 AMD/1RUR.  On June 3. the AMD has appreciated against RUR insignificantly - to 7.2AMD/1RUR, depreciated against USD and EUR to 479AMD/1USD and 536AMD/1EUR.
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