Tuesday, March 28 2017 15:18
Karine Melikyan

Djavadyan: the higher level of dollarization and slow decrease of deposit rates restrict the shunt of the Central bank in respect to the further softening of monetary-loan terms

Djavadyan: the higher level of  dollarization and slow decrease of  deposit rates restrict the shunt of the Central bank in respect to  the further softening of monetary-loan terms

ArmInfo. The higher level of   dollarization and slow decrease of deposit rates restrict the shunt  of the Central bank in respect to the further softening of  monetary-loan term, but the main task of the regulator is  to provide  the prices sustainability.  Such a statement was made by Arthur  Djavadyan, the Chairman of  the  Central Bank of Armenia,  while  commenting on the margins of his interview to ArmInfo  the  possibility of  review of  refinancing rate decreased  on February 14  this year from 6,25% to 6%. He reminded that in the beginning of the  stage of monetary loan terms softening it formed 10,5 %, after which,  starting with August 2015 the Central Bank started to decrease  step  by step the key interest rate, to give a pulse to inflation and  consumer demand. He clarified that the consumer prices in Armenia  have been decreasing in Armenia recently due to economic crisis  in  Russia, affecting the consumer demand for the reason of  Armenian  nationals  money  transfers decrease from  Russia. 

 "The Central Bank of Armenia is not intended to continuer softening  the monetary policy, aimed at step by step increase of inflation,  because considers that too low rates may generate risks. The rates  lower than those of current level might  negatively  impact the real  and financial sectors of economy. That is why the Central Bank will  be more careful while reviewing the options of those further  decrease," Djavadyan stated accentuating  as follows: " We evaluate  the depreciation of monetary-loan terms as sufficient." Another  decision on the rate level is to be taken by the Central Bank of  Armenia on March 28 this year.  In annual view ( February 2017 versus  February 2016) the consumer market shows  a deflation - at 0,2%  (versus that  of 1,7 for the same period of last year), but in this  case the nonfood  products and services tariff prices show almost  equal step of decrease - for 3,5 and 3% respectively, while the  foodstuff prices flew up for 3,1 %.

In January-February 2017 the consumer prices increased for 1,7%   being caused by foodstuff prices increase for 5,5 %, within the  nonfood products price decrease for 1,2% and services tariffs  drop  down for 1,6.  In comparison to January-February 2016 the deflation  at the consumer market formed 0,4% due to the 3,4%  dropdown of  nonfood products prices, as well as of services tariffs decrease  for  2,5%, while the foodstuff prices grew for 2%. According to the  information shared with ArmInfo by the National Statistics Service of  Armenia, the consumer prices in Yerevan decreased in February for 1%  versus that for 1,5 % a year ago.

If the Central Bank estimates that the targeted indicator derivation  risks  in respect to the inflation do increase, it will respond in a  proper manner using all the appropriate tools to secure the  sustainability in the country," Djavadyan said, adding that in the  average-term prospective  the prices will remain at the same level,  and the inflation fastening up to 4% indicator by the end of  2019  should be gradual.  " We think  that this (gradual reaching  the key  indicator of inflation) will provide the general balance of the  economy with minimal   negative consequenses," the general banker  mentioned.   

According to CBA forecast, the inflation in 2017 will form 0,6%, in  2018  - 2,2%. Djavadjyan said also that the Central bank could  increase the country economy growth forecast, but for the year of  2017 it will remain in the range of 2,2 - 2,3 %. "The growth is  preconditioned  mainly with recovery of internal demandaqnd   effective implementation of    government projects aimed at the  improvement of export and investments, as well as with the structure  reforms in progress," the Central bank Chairman mentioned.  The  Central Bank Head thinks that  the commercial banks with their number  decreased in 2017 by 4 down to 17, have demonstrated a good  resistance to shocks and risks. " The ability of banks to cover the  risks has increased, and, as the consequence, the liquidity grew as  well, creating a potential for funding new business projects," he  said, informing also that the sufficiency of the banking sector  capital forms 20%, the share of non-working assets in 2016 decreased  for 1 percent based point - down to 6,2%, and the foreign investors  share makes 62 % of Armenian banking system  capital. 

To note, as of the year of 2017 the financial network of Armenia  comprises 17 banks, 33 lender companies and 6 insurance entities. In  2016 the Procredit Bank (unified with INECOBANK), BTA Bank (unified  with ArmEconomBank), Areximbank-Gazprombank Group (unified with  Ardshibank), and Armenian Development Bank (unified with Ararat bank)  dropped off the market due to dissolution and restructuring  mentioned.

As of January 1, 2017 the assets of banking system formed AMD 4.05  trln ( annual growth at 22,9%), loan exposures   formed AMD 2,6 trln,  exposures in stae securities - AMD 423.4 bln (growth for 76,9%), time  deposits - AMD 1,6 trln (growth for 29,2%), call liabilities -  AMD  692,1 bln (growth for 28%). The summarized total capital OF Armenian  banks in 2017 reacherrd AMD 648,6 bln, within  one year view  increasing for 29,3% in annual view in general due to the growth of  statutory capital, which growth  form 38,3%. The year of 2016 has  been completed by the banking system of Armenia with net profit  forming AMD 18, 3 bln ( the forex exchange rate as of 31.12.2016  formed AMD 483,94/USD 1)

POST A COMMENT
Input digits     


News
Ameriabank leads Armenian mortgage marketAmeriabank leads Armenian mortgage market
Global Finance: Converse Bank is Armenia`s leading bank in Trade FinanceGlobal Finance: Converse Bank is Armenia`s leading bank in Trade Finance
Expert forecasts that growth of business activity in Armenian economy  to reach 7% this year Expert forecasts that growth of business activity in Armenian economy  to reach 7% this year 
Wizz Air to start operating flights to 4 new routesWizz Air to start operating flights to 4 new routes
ZCMC paid unprecedented taxes in 2022, exceeding the figure of the previous year by almost two and a half times.ZCMC paid unprecedented taxes in 2022, exceeding the figure of the previous year by almost two and a half times.
Armenian NPP comments on Azerbaijani Human Rights Commissioner`s call Armenian NPP comments on Azerbaijani Human Rights Commissioner`s call 
Armenia`s IT sector rapidly developing - reps Armenia`s IT sector rapidly developing - reps 
Armenia, Qatar discuss opportunities for investment cooperation Armenia, Qatar discuss opportunities for investment cooperation 
44,929 more officially registered jobs in Armenia as against last  year44,929 more officially registered jobs in Armenia as against last  year
Italian businesses interested in Armenia`s investment environment Italian businesses interested in Armenia`s investment environment 
Vahan Kerobyan raises Artsakh issue at Global Forum on Food and  Agriculture in BerlinVahan Kerobyan raises Artsakh issue at Global Forum on Food and  Agriculture in Berlin
Corporacion America  CEO expresses readiness to increase investments  in ArmeniaCorporacion America  CEO expresses readiness to increase investments  in Armenia
Loss ratio in CMPTL market decreased from 79% to 66% in 2022 Loss ratio in CMPTL market decreased from 79% to 66% in 2022 
Armenian banks record 3-fold growth in net profit in 2022Armenian banks record 3-fold growth in net profit in 2022
901 transactions to amount of over AMD 56bln effected under economic  modernization programme in 2022901 transactions to amount of over AMD 56bln effected under economic  modernization programme in 2022
Armenia`s economy will not be able to withstand the expansion of  Turkish goods- EconomistArmenia`s economy will not be able to withstand the expansion of  Turkish goods- Economist
Armenia`s government to support hotels in Syunik, Vaiots DzorArmenia`s government to support hotels in Syunik, Vaiots Dzor
In Armenia, terms for removing arrest from citizens` accounts to be  reduced to 1-2 days from previous 7 days or moreIn Armenia, terms for removing arrest from citizens` accounts to be  reduced to 1-2 days from previous 7 days or more
Share of Armenia`s authorized capital in  EDB increased to 4.2291%,  while Russia`s stake in EDB decreased  to 44.7878%  Share of Armenia`s authorized capital in  EDB increased to 4.2291%,  while Russia`s stake in EDB decreased  to 44.7878%  
Armenia, Germany discuss number of issues on cooperation in economic  sectorArmenia, Germany discuss number of issues on cooperation in economic  sector
$350mln to invested in Zvartnots International Airport$350mln to invested in Zvartnots International Airport
Declaration of income: We have not achieved tax egalitarianism -  ExpertDeclaration of income: We have not achieved tax egalitarianism -  Expert
In Jan-Nov 2022, Armenian-Georgian trade turnover doubled compared to  2021, amounting to $759 million- PashinyanIn Jan-Nov 2022, Armenian-Georgian trade turnover doubled compared to  2021, amounting to $759 million- Pashinyan
Irakli Garibashvili announces about 70% increase in foreign trade  turnover with ArmeniaIrakli Garibashvili announces about 70% increase in foreign trade  turnover with Armenia
The beneficiary of The beneficiary of "The Power of One Dram" in January is the educational program "Talentum"
Fly Arna airline announces launch of new nonstop flights to Saint  PetersburgFly Arna airline announces launch of new nonstop flights to Saint  Petersburg
Vardan Aramyan: With the current quality and level of investments,  there is no need to talk about the growth of the economy`s potentialVardan Aramyan: With the current quality and level of investments,  there is no need to talk about the growth of the economy`s potential
Ministry of Economy of Armenia expects that ferry service to start  operating in Q1 2023Ministry of Economy of Armenia expects that ferry service to start  operating in Q1 2023
Armenia`s gross international reserves move down from historical highArmenia`s gross international reserves move down from historical high
Armenia`s tax revenues AMD 1,926bln in 2022Armenia`s tax revenues AMD 1,926bln in 2022
Robert Khachatryan: receiving station and satellite control center to  be put into operation during 2023Robert Khachatryan: receiving station and satellite control center to  be put into operation during 2023
Armenia extending restrictions on import of cement and clinkerArmenia extending restrictions on import of cement and clinker
New Year in Idram. results of 2022New Year in Idram. results of 2022
Ameriabank named Best Foreign Exchange Bank in Armenia by Global FinanceAmeriabank named Best Foreign Exchange Bank in Armenia by Global Finance
Economic growth in 2022 is not inclusive and leads to widening of  social gap - Luys FoundationEconomic growth in 2022 is not inclusive and leads to widening of  social gap - Luys Foundation
In 2022, social investments of Zangezur Copper-Molybdenum Plant  amounted to about 3.5 billion dramsIn 2022, social investments of Zangezur Copper-Molybdenum Plant  amounted to about 3.5 billion drams
Tariff for final consumers of electricity in Armenia will remain  unchanged in 2023Tariff for final consumers of electricity in Armenia will remain  unchanged in 2023
CBA to put into circulation new batch of 3rd generation thousandth  banknotes from January 23, 2023CBA to put into circulation new batch of 3rd generation thousandth  banknotes from January 23, 2023
Vahan Kerobyan: Unemployment rate in Armenia in 2023 will be below  10%Vahan Kerobyan: Unemployment rate in Armenia in 2023 will be below  10%
$56mln recovered to state budget in 2022$56mln recovered to state budget in 2022
CBA improves net private transfers forecast for 2022CBA improves net private transfers forecast for 2022
CBA improves unemployment forecast for 2022 CBA improves unemployment forecast for 2022 
RF Deputy Minister: financial institutions of Russia, Armenia are  expanding  network of correspondent relationsRF Deputy Minister: financial institutions of Russia, Armenia are  expanding  network of correspondent relations
Vahan Kerobyan: Number of labor migrants to reduce significantly next  yearVahan Kerobyan: Number of labor migrants to reduce significantly next  year
EDB analysts expect 12% growth in mutual trade in EAEU by end of 2022EDB analysts expect 12% growth in mutual trade in EAEU by end of 2022
Analyst: Global confrontation between West and Russia urgently  dictates the acceleration of integration processesAnalyst: Global confrontation between West and Russia urgently  dictates the acceleration of integration processes
Minister of Economy voices main risks to achieve economic growthMinister of Economy voices main risks to achieve economic growth
Final phase of ADB-financed bypass road program startsFinal phase of ADB-financed bypass road program starts
Deputy Prime Ministers of Armenia, Russia took part in solemn  ceremony of commemorative cancellation of stamp on establishment of  diplomatic relations between countriesDeputy Prime Ministers of Armenia, Russia took part in solemn  ceremony of commemorative cancellation of stamp on establishment of  diplomatic relations between countries
First stage of work under First stage of work under "Engineering City" program has been  successfully completed
Deadlines for submission of income declarations by individuals have  been changedDeadlines for submission of income declarations by individuals have  been changed
Armenia, Netherlands discuss new opportunities for cooperation in  technological fieldArmenia, Netherlands discuss new opportunities for cooperation in  technological field
Over 700,000 officially registered employees in Armenia Over 700,000 officially registered employees in Armenia 
Armenian Parliament elects CBA Deputy Governor and new member of CBA  Board Armenian Parliament elects CBA Deputy Governor and new member of CBA  Board 
IFC, Amundi-Acba Launch Partnership to Increase Investment in Armenia’s InfrastructureIFC, Amundi-Acba Launch Partnership to Increase Investment in Armenia’s Infrastructure
Structural reforms more urgent amid significant uncertainty – IMFStructural reforms more urgent amid significant uncertainty – IMF
Experts: Armenia`s energy security is key component of national  securityExperts: Armenia`s energy security is key component of national  security
Vahe Hovhannisyan appointed new Minister of Finance of ArmeniaVahe Hovhannisyan appointed new Minister of Finance of Armenia
First in Armenia. IDBank presents Visa Travel card for travel loversFirst in Armenia. IDBank presents Visa Travel card for travel lovers
Structural reforms more urgent amid significant uncertainty – IMFStructural reforms more urgent amid significant uncertainty – IMF
Read more


Exchange rates
27.01.2023
RUB5.71-0.02
USD396.020.37
EUR431.27-0.19
GBP490.04-0.21
CAD297.401.83
JPY30.510.01
CNY58.490.05
CHF430.13-0.77