Central Bank Head: There are no problems with the outflow of funds in  the Armenian foreign exchange market

ArmInfo. There are no problems with the outflow of funds on the Armenian foreign exchange market. Chairman of the Central Bank of the Republic of Armenia  Martin Galstyan stated this at a press conference on December 15.

"I would like to emphasize that, according to our estimates, in  fundamental terms, we do not observe any ongoing risks from the real  sector at the moment. The exchange rate reflects the general  situation in the country. I believe that our actions are consonant  and the policy pursued by the Central Bank is adequate," he said.

In addition, M. Galstyan noted that if in the first days of the  declaration of martial law the risk premium for lending to the  country in the international financial market increased, now it has  returned to its previous level.

"These are two important factors that either will not have an impact  on the exchange rate, or will have a positive effect," Galstyan  stressed.

At the same time, he pointed out that the balance sheet portfolio of  economic entities adjusted more towards the currency, which resulted  in a demand for the US dollar, and this naturally affected the  exchange rate.  "Excessive demand for foreign exchange from the  private sector and similar expectations for the future were also  observed in business. According to our calculations, those households  and representatives of the business segment who, trying to balance  their assets by closing deposit agreements, lost 5-7 billion AMD on  interest rates alone.  In an environment of economic uncertainty,  this behavior may seem natural. However, this profit could become an  additional source of income for households and businesses during the  crisis. I don't know how many crises still have to happen for the  public to understand that this should not be done. It is a shame that  people do not draw conclusions from the past. After all, it is mutual  trust that is very important for the country to get out of the crisis  situation, "M. Galstyan said.

In this regard, the head of the Central Bank stressed that the right  decisions must be made during the crisis period: "It is at this time  that people should trust us and be sure that we protect their  interests in making financial decisions."

He stated that the Central Bank will remain faithful to its mandate  in terms of ensuring the normal course of work in the financial  market, the stability of the financial system and price stability.  "We discussed these issues with the commercial banks of Armenia," M.  Galstyan emphasized, adding that the Regulator will continue to  provide banks with dram and now foreign currency liquidity. 

According to the Financial Rating of Banks of Armenia as of September  30, 2020, prepared by ArmInfo IC, the volume of deposits of  individuals (on demand and urgent) amounted to 2.01 trillion drams ($  4.1 billion), having increased by 10% in y-o-y terms, and decreased  by 0.2% in the Q3 alone. Time deposits of individuals dominate in  their structure - over 1.5 trillion drams ($ 3.1 billion, or 71.6% in  total time deposits), having increased by 7.1% on an annualized  basis, and decreased by 1.3% in the third quarter. The total  portfolio of term deposits (legal entities and individuals) grew by  10.5% over the year, and by  0.7% in the third quarter alone,  amounting to 2.2 trillion drams ($ 4.5 billion).