National dram appreciates, as high activity on foreign exchange interbank market continues

ArmInfo. On July 18-22 compared to the previous week the amount of transactions on the interbank forex market grew 3.8% amid daily activity of $1-$3.8 mln, which appreciated the dram to 476AMD/1USD.  At the same time, NASDAQ OMX Armenia has seen no transactions this week either. The Central Bank still refrains from interventions.

In general, in the first half of 2016, AMD appreciated from 482 to 477 AMD/$1, depreciating in mid Feb (from 482 to 496 AMD/$1 on Feb 12), in early April (from 479 to 484.5 AMD/$1), in mid May (from 479 to 480.5 AMD/$1 on May 12), in early and in late June (from 478 to 479 AMD/$1 on June 3, and from 476 to 477 AMD/$1 on June 30), maintaining the 47 AMD/$1 level in the first half of July and totaling 476AMD/1USDon July 22.  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. The interbank forex market demonstrated daily activity, registering the biggest amounts of transactions on July 20 - $3.8mln. This time, the total amount during the week (July 18 - July 22) was $6.8mln (versus $6.550 mln the previous week) at the average exchange rate of 476.57 AMD/$1 (versus the previous 477.09 AMD/$1).

The source says that on July 18-July 22, there was a high activity of dollar and euro transactions on the intra-bank market, amid moderate growth of ruble transactions. The purchase of USD grew by 1.7% over the week and EUR by 24.7% amid growth of sales of USD and EUR by 9.3% and 0.7% respectively. At this background purchase of Rubles grew by 1.5% and sale of Rubles grew by 2.5%. Thus, the banks bought $87.98 mln at the average exchange rate of 475.70 AMD/$1 and 10.6 mln EUR at the average exchange rate of 523.31 AMD/1EUR and 1.3 bln RUR at the average exchange rate of 7.47 AMD/1 RUR, while they sold $105.8 mln at the average exchange rate of 476.97 AMD/$1 and 14.3 mln EUR at the average exchange rate of 528.40 AMD/1EUR and 435.4 mln RUR at the average exchange rate of 7.56 AMD/1RUR.

During the previous week (July 11 -July 16), the Armenian banks provided AMD loans worth 36.4 bln and USD loans worth $55.3 mln. As compared with the previous week (July 4-9), AMD loans declined by 9.5%, amid 88.7% growth of the ones in terms of USD.

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. Later, AMD started revaluating again since mid-April. By April 29, AMD appreciated 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. The first half of June AMD demonstrated moderate depreciation, followed by appreciation:  thus by June 30 the AMD stood at 477 AMD/$1, 529 AMD/1EUR, and 7.4 AMD/1 RUR. In the first half of July AMD was still at 477 AMD/$1 (July 15), slightly depreciating against EUR to 530 AMD/1EUR and devaluating against Russian Ruble to 7.6 AMD/1RUR.  Afterwards, on July 18-22, the exchange rates averaged 476AMD/1USD, 525AMD/1EUR, and 7.5AMD/1RUR.