Tuesday, December 15 2020 19:38

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.