Dram keeps appreciating

ArmInfo. On September  19-24, the amount of transactions on the interbank forex market of  Armenia grew twofold. At the same time, on the intrabank market the  operations in terms of US dollar continued their upward dynamics and  the Armenian dram (AMD) kept appreciating. Thus, AMD appreciated  against USD and EUR to 473.5 AMD/$1 and 531 AMD/1EUR, respectively,  and depreciated against Russian ruble (RUR) to 7.4 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:  $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 a result, in Jan-Aug 2016, AMD  appreciated against USD from 482 to 475 AMD/$1, depreciating against  EUR from 529 to 530 AMD/1EUR, and against RUR from 6.9 to 7.3  AMD/1RUR. During the first ten days of September, AMD retained its  positions against USD and then started to appreciate. 

The press office of the Armenian Central Bank has told ArmInfo that  on September 19-24 the interbank forex market experienced growth in  daily transactions, with the biggest amount registered on Saturday -  $4.4 mln and the smallest one fixed on Friday - $500 thsd. On  September 19-24, the total amount of operations on the interbank  forex market grew twofold to $8.7 mln (versus $4.5 mln a week before,  with a 23% decline), and the average exchange rate was 473.89 AMD/$1  (versus 474.35 a week before).On the intrabank market, the USD  purchase rose by 13.3% (versus 11.4% increase a week before), the EUR  purchase grew by 1% (versus 28.8% rise a week before). At the same  time, the USD sales increased by 6.8% (versus 6.3% decline a week  before) and EUR sales dropped by 10.7% (versus 16% growth a week  before). The RUR purchase declined by 14.5% (versus 45.5% growth a  week before), while the RUR sales fell by 29% (versus 19.5% rise a  week before). As a result, $84.8 mln was purchased at the average  exchange rate of 472.77 AMD/$1; 7.8 mln EUR was bought at 527.54  AMD/1EUR; and 1.3 bln RUR was bought at 7.31 AMD/1RUR. At the same  time, $78.6 mln was sold at 474.20 AMD/$1, 12.5 mln EUR was sold at  532.22 AMD/1EUR and 400.7 mln RUR was sold at 7.41 AMD/1RUR.

According to the source, during the previous week (September  12-September 17), the Armenian banks provided AMD loans worth 30.6  bln AMD and USD loans worth $43.3 mln.  As compared with the previous  week, the amount of USD loans grew by 17.7%, while the amount of AMD  loans fell by 27%. 

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 479AMD/$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 24 AMD appreciated against USD and EUR  to 473.5 AMD/$1 and 531 AMD/1EUR, respectively, and depreciated  against RUR to 7.4 AMD/1RUR.