Wednesday, January 13 2021 12:52

ArmInfo.The Central Bank of Armenia will intervene in the foreign exchange market to ensure the normal functioning of the financial sector. This is stated in the  message of the Central Bank of Armenia, spread on January 13.

The report also notes that the Central Bank of Armenia continues to  monitor financial markets and, if necessary, will apply all the tools  in its arsenal, guaranteeing price stability and financial stability.   Note that previous announcements by the Central Bank of its intention  to enter the foreign exchange market with interventions were made on  November 24 and December 15, 2020. Prior to that, a noticeable  devaluation of the dram began to be observed in the retail foreign  exchange market of Armenia from the second decade of October 2020,  with the approach of November 18 close to the mark of 500 AMD / $ 1  on average, and the next day the exchange rate of the AMD against the  dollar has already exceeded 501 AMD / $ 1. and by November 23 it  reached 507 dr / $ 1 on average, continuing to weaken more  pronounced. Thus, on November 24, the dram exchange rate against the  US dollar jumped to 516 AMD / $ 1 on average, against the euro - to  612 AMD / 1 euro, and against the ruble it rose moderately to 6.9 AMD  / 1 ruble. However, after the announcement on November 24 by the  Central Bank of its intention to intervene in the foreign exchange  market, a slow strengthening of the dram has already been outlined  since November 26, and by December 1, the dram strengthened against  the dollar to 507 AMD / $ 1 on average, against the euro - to 607 AMD  / 1 euro, and against the ruble - up to 6.7 dr / 1 ruble, continuing  this attitude on December 2 - respectively, up to 506.5 dr / $ 1 and  605 dr / 1 euro, and "frozen" against the ruble at 6.7 dr / 1 ruble.  But already from December 3, the dram devalued again to 511.5 AMD / $  1,619 AMD / 1 euro and 6.9 AMD / 1 ruble, with the continuation of  this trend in the following days, and by December 11, the dram  weakened against the dollar to 521.5 AMD / $ 1, against the euro - up  to 634 AMD / 1 euro, against the ruble - up to 7.2 AMD / 1 ruble. And  already on December 15, the dram devalued against the dollar and euro  to 528 AMD / $ 1 and 640 AMD / 1 euro, while maintaining its position  against the ruble. After the repeated announcement of interventions  and high activity in the interbank currency market during the last  ten days of December 2020, the dram tuned in to strengthen, revaluing  by December 29 against the US dollar to 522.5 AMD / $ 1 on average,  against the euro - up to 639 AMD / 1 euro, against the ruble - up to  7.1 dr / 1 ruble. As a comparison, we note that at the end of 2019,  the AMD exchange rate against the US dollar was 479.3 AMD / $ 1 on  average, against the euro - 531 AMD / 1 euro, against the ruble - 7.7  AMD / 1 RUB. According to the Central Bank of Armenia, in  January-October 2020, the Central Bank of the Republic of Armenia in  the foreign exchange market made interventions for a total of $ 217.9  million, of which $ 90.9 million was bought (January-February and  April) and $ 127 million sold (March-April) ... During this period,  the dram against the dollar from January 479.09 AMD / $ 1 reached the  April 493.1 AMD / $ 1 (purchase / sale). And if in January-February  interventions in the foreign exchange market were exclusively for  buying, and in March - only for selling, then in April the Central  Bank carried out operations for both buying and selling, and the  volume of sales almost doubled the volume of purchases ($ 57 million  against $ 33.1 million), which formed the purchase rate at the level  of 481.66 AMD / $ 1 and the sale rate at the level of 504.45 AMD / $  1. In May-October, the Central Bank did not perform operations on the  foreign exchange market. Since the announcement (November 24) by the  Central Bank of its intention to carry out interventions through  December 30 inclusively on the interbank currency market, in total,  banks have made dollar transactions in the amount of about $ 33  million, of which $ 28 million fell in the last decade of December,  and the maximum $ 10.4 million was "highlighted" December 29th. In  November, the foreign exchange interbank was empty for 11 days, of  which 9 days fell on the period until November 25.  In total, in  November-December, the foreign exchange interbank was empty for 22  days. It should be reminded that since September 27, Azerbaijan began  military operations in Nagorno-Karabakh, which demanded maximum  mobilization of resources from Armenia. However, the actual surrender  of the Armenian side with the signing of an armistice agreement on  the night of November 9-10 with the loss of the entire NKR security  belt from seven regions and part of Artsakh itself led to a  destabilization of the internal political situation in Armenia and  some economic imbalance. Moreover, in order to get out of the current  situation, Armenia will have to go for new foreign borrowings, a  difficult process of economic financial stabilization, which  naturally could not but affect the situation in the foreign exchange  market.