ArmInfo. The Central Bank of Armenia, in order to strengthen financial stability and provide the prerequisites for the creation of currency liquidity buffers, again amended Regulation No. 2 "Regulation of banks, basic economic standards of banking."
In particular, paragraph 50 of this provision has been amended regarding compulsory reservation for borrowed funds. The decision on this was adopted by the Central Bank Council on October 7, 2019, which will enter into force the day after being published on the Central Bank's official website (the publication on the Central Bank website is dated October 7, 2019). At the same time, the provisions established by this decision apply to actual periods beginning on October 9, 2019, and which are the basis for the latest reporting periods. In particular, paragraph 50 of Regulation No. 2 as amended reads as follows: AMD, foreign currency and metal accounts funds attracted by banks (including foreign banks operating in Armenia) are subject to reservation. So, the obligatory reservation on attracted dram funds is carried out in drams; on attracted dollar funds - 12% is reserved in drams, and 6% - in dollars; on attracted euro funds - 12% is reserved in drams, and 6% - in euros; and for funds raised in other foreign currencies, as well as for depersonalized metal accounts - 12% is reserved in drams, and 6% - in dollars. Moreover, on borrowed funds falling under paragraphs 24.1.3 and 24.1.4 of regulation No. 2, mandatory reservation is fully carried out in drams, with the exception of funds raised by banks on their own bonds issued, for which mandatory reserve is zero. This decision states that the obligatory reservation of borrowed funds is carried out within the time period established by paragraph 52 of this provision. The risk associated with changes in the exchange rate is borne by the bank.
Clause 51 of Regulation No. 2, which describes the mechanism for regulating the amount of the amount to be reserved in drams and foreign currency for attracted dram and foreign currency funds (including for metal accounts), has not changed.
Note that prior to this, in 2019, the June change in the required reserve ratio provided: for attracted dollar funds - 16% reservation in drams and 2% reservation in dollars; on attracted Euro funds - 16% reservation in drams and 2% reservation in euros; on funds attracted in other foreign currencies (including on metal accounts) - 16% reservation in drams and 2% reservation in dollars; and on attracted dram funds - reservation is completely in drams. Later, another change in the norm of obligatory reservation followed - accordingly, for the funds raised in foreign currency, instead of the previous 16% of the reservation in drams, 14% were set, and the previous 2% of the reservation in foreign currency was replaced by 4%.