Interbank forex market awakens

ArmInfo. On October 24-28,  the amount of transactions on the interbank forex market of Armenia  increased 33.2% after a fortnight of decline. At the same time, on  the intrabank market the purchase/sale operates experienced different  dynamics.

Thus, in the current week, AMD devaluated against USD from  475 to 476 AMD/USD1 and EUR from 518 to 519 AMD/1EUR. The AMD/RUR  exchange rate was left unchanged- 7.6 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 September alone, AMD revaluated against  USD from 475 to 474 AMD/USD1.  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 H1, Central Bank bought USD on the foreign exchange  market in June (USD50.2 mln) and April (USD2.4 mln) and sold in  January and February (USD53.1 mln and USD41.5mln, respectively).

As the press office of the Central Bank of Armenia has told ArmInfo,  on October 24-28, the interbank forex market increased the daily  amounts of its transactions, with the largest amount registered on  Tuesday - USD6.7 mln and the smallest amount was on Monday -  USD1.2mln. The total amount of transactions on the interbank forex  market for Oct 24-28 increased 33% to USD16.650 mln (versus the  previous USD12.5 mln), forming the average exchange rate of 475.60  AMD/1USD (versus the previous 475.51 AMD/1USD). In the meantime, on  the intrabank forex market USD purchase grew 9% (versus 15% growth a  week before), while EUR purchase decreased by 33% (versus 6.6% growth  a week before), USD sales decreased by 8.9% (versus 12.6% growth a  week before) and EUR sales increased by 6.7% (versus 26.4% decline a  week before).  At the same time, RUR transactions on the intrabank  forex market varied significantly: RUR purchase fell 8.3% after 11.1%  growth a week before, while RUR sales increased sharply 47.7% after  6.4% after decline a week before. As a result, USD purchase made up  110.1 mln at the average exchange rate of 474.77 AMD/USD1, EUR  purchase - 6.5 mln at 515.53 AMD/1EUR, and RUR purchase 1.1 bln RUR  at 7.56 AMD/1RUR, whereas USD sales amounted to 83.1 mln at 475.95  AMD/USD1, EUR sales - 14.3mln at 519.32 AMD/1EUR, and RUR sales -  521.3 mln RUR at 7.66 AMD/1RUR.

According to the source, during the previous week (October 17-22),  the Armenian banks provided AMD loans worth 48.6bln AMD and USD loans  worth 33.5 mln. The weekly dynamics of AMD and USD loans was upward.   Particularly, amount of AMD loans fell 9.5% and the amount of USD  loans - 39%, versus last weeks 25.8% and 12.7%, growth.  

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 the first half of October (10-15) AMD devaluated  against USD (to 477 AMD/USD1 from 4744 AMD/USD) and RUR (to 7.6  AMD/1RUR from 7.5 AMD/1RUR) and revaluated against EUR to 527  AMD/1EUR from 532 AMD/1EUR. As of October 28, the exchange rates were  as follows:  476AMD/1USD. 519AMD/1EUR, and 7.6AMD/1RUR.