ArmInfo. In 2021, Armenia expects to receive a Stand-By loan from the International Monetary Fund (IMF) in the amount of about $ 70 million (with a probable adjustment of this amount). The Chairman of the Central Bank of the Republic of Armenia Martin Galstyan announced this on December 15 during a press conference.
In this regard, the head of the Central Bank recalled that on December 11, the IMF Executive Board summed up the results of the 3rd stage of the 3-year program with Armenia, which is an important assessment of the macroeconomic stability of the Republic of Armenia. "The positive shifts noted by them in our development are very important. Moreover, the IMF noted that the monetary and financial policies of the Central Bank, aimed at ensuring price stability and financial stability since the beginning of the year, have been proportionate and consistent. This is a great achievement and a good a signal for foreign investors and participants in the international capital market, "Galstyan said.
To recall, yesterday the Executive Board of the International Monetary Fund (IMF) completed the third review of the Republic of Armenia's performance under the program supported by the Stand-By Arrangement (SBA). Within the program Armenia will receive SDR 25.714 million (about US$37 million), bringing total disbursements to SDR 231.657 million (about US$ 315 million).
According to IMF's assessment, monetary policy has rightly been accommodative, supporting the economy and keeping the banking sector liquid. Inflation remained low, Nevertheless, according to IMF's recommendation the Central Bank of Armenia should carefully monitor market developments and stand ready to adjust its monetary policy stance, as necessary, to preserve macroeconomic stability, while maintaining exchange rate flexibility to absorb shocks under its inflation targeting framework. While the financial system has not shown signs of stress, IMF advises the Central Bank continue to identify vulnerabilities and risk factors in the banking system and stand ready to take relevant regulatory actions.
Members of the IMF Board responded positively to the fact that the socio-economic shocks did not have a significant negative impact on the financial system. Accordign to IMF Board, financial sector reforms, some of which are underway, will support the recovery and long-term growth.
To note, on May 17, 2019, the IMF approved the provision of a stand-by credit line to Armenia for a three- year "transit period" in the amount of SDR 180 million (equivalent to almost $ 248.2 million), or about 139.75% of Armenia's quota in the IMF. From this amount, it was planned to immediately receive SDR 25.714 million (equivalent to nearly $ 35.5 million) with the remainder foreseen based on six half- year estimates. A year later, in mid-May 2020, the IMF increased its financial support to Armenia by SDR 128.8 million (about $ 175 million), which, together with the authorities' intention to attract resources accumulated under the SBA, made it possible to receive SDR 206 million (about $ 280 million) payable immediately. These loan funds are aimed at strengthening Armenia's economic foundations and policies, as well as carrying out structural reforms, in particular, improving management efficiency and improving the business environment.
According to the updated IMF forecast, Armenia's GDP by the end of 2020 will decrease by more than 7%. On the state debt of Armenia, the IMF predicted for 2020 that the share in GDP will exceed 60% with subsequent growth in 2021 to almost 69%, and in the medium term, the national debt will gradually decrease and by 2026 will fall below 60% of GDP.
