Wednesday, January 5 2022 14:16

ArmInfo. Armenia's gross international reserves in December 2021 compared to December 2020 increased by 33% or by $ 748.5 million (against a 4.1% decline a year  earlier and a pre-COVID 14% decline), exceeding $ 3.026 billion. In  the structure of gross international reserves, foreign assets in hard  currencies dominate - $ 2.966 billion, and the share of SDR in the  IMF accounts for $ 59.9 million.

According to the report of the Central Bank of Armenia, foreign assets in hard currency changed the y-o-y dynamics from the 5.3% decline to 32.3% growth, and the share  of SDR in the IMF slowed down growth from 5-fold to 69.4%, against  the pre-COVID decline of the first one by 15.1% and a 4.5-fold  increase of the second one.

In November 2021 alone, the gross international reserves decreased by  5.5% (or $ 175.2 million) from the October 0.3% growth. This was  accompanied by a reversal of the trend in the share of SDR in the IMF  towards a decline of 5.9% from an insignificant growth of 0.001% in  October, with a deterioration in the dynamics of foreign assets in  hard currency from 0.3% growth to 5.4% decline. A year earlier, in  November 2020, the gross international reserves trend was also  downward (1.6%), due to a similar decline in foreign assets in hard  currency (1.6%) with a 7.4% decline in the share of SDR in the IMF,  which was also observed in the pre-COVID period of November 2019  (3.8-14.4%).

In January-November 2021, Armenia's gross international reserves  increased by 15.7% or by $ 410.7 million (against a decline of 20.1%  in 11 months of 2020 and a pre-COVID growth of 5.1% in 11 months of  2019). In their structure, foreign assets in hard currency increased  by 13.8% (against a 21.1% decline in 11 months of 2020 and a  pre-COVID 5.1% growth in 11 months of 2019), and the share of SDR in  the IMF increased 6.7-fold (against an 5.7-fold increase for 11  months of 2020 and 18.3% growth for 11 months of 2019).

During 11 months of 2021, the decrease in the gross international  reserves was observed in March-April, July, September and November.  The decline in foreign assets in hard currency was also recorded in  March- April, July-August and November. And the share of SDR in the  IMF showed growth in April and August alone, and in both cases the  increase was significant.

On December 17, 2021, the Executive Board of the International  Monetary Fund (IMF) approved the provision of 51.43 million SDR  (about $ 72 million) to Armenia under the Stand-By Arrangement (SBA).  As a result of attracting this amount by the Armenian authorities,  the total amount of deductions will amount to SDR 283.09 million  (about $ 396 million).  Moreover, Armenia's three-year SBA of SDR  308.8 million (about US$ 432  million), equivalent to 239.75 percent  of Armenia's quota in the IMF,  was approved by the IMF's Board on  May 17, 2019 and augmented on May  18, 2020.  The Fund's financial  support will help Armenia meet its  challenges-including the social  and economic implications of COVID-19  pandemic-while moving ahead  with its reform agenda.  Going forward,  the economic outlook is  generally positive with medium-term growth  projected around 4< - 5  percent, contingent upon the COVID-19  developments, external demand,  and progress on structural reforms  implementation.

Prior to that, on August 23, 2021, the largest ever distribution of  SDR by  the International Monetary Fund in the amount of $ 650  billion came  into force. According to the distribution of SDR  according to the  promptly paid quotas of the IMF member countries,  an amount of 123.4  million SDR (about $ 175.2 million) was allocated  to Armenia.  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 that Armenia would 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 within the SBA, made it   possible to receive SDR 206 million (about $ 280 million), payable   immediately. These loan funds are aimed at strengthening the economic   foundations and policies of Armenia, as well as carrying out  structural reforms, in particular, improving the efficiency of   governance and improving the business environment. And on December   11, 2020, the IMF approved for Armenia the results of the third stage   of the three-year program, thereby opening access to reserve   financing - a Stand-By loan in the amount of SDR 25.714 million   (almost $ 36.7 million). Within the framework of this program, a   total of 231.657 million SDR (about $ 315 million) was provided to   Armenia.

It should be noted, at the end of 2020, Armenia's gross international  reserves  amounted to $ 2.616 billion, foreign assets in hard  currency - $  2.607 billion, and the share of SDR in the IMF - $ 9  million. In  2020, GIS decreased by 8.2% (against growth by 26.1% in  2019),  foreign assets in hard currency - by 8.3%, and the share of  SDR - by  46%, against growth by 26.2% and 3.2% respectively in 2019.  During  2020, the downward dynamics of the GIS was observed in  January-April,  then an upward trend was highlighted in May, after  which the decline  resumed, persisting until December. The share of  SDR in the IMF also  declined in the first four months, having  increased sharply in May,  after which the decline resumed, with a  monthly moderate drawdown  observed in June-November, and a sharp one  in December. Foreign  assets in hard currency showed an upward trend  in May, August and  December. The share of bank gold in the gross  international reserves  of Armenia was zeroed back in December 2003.