ArmInfo.The impressive inflow of foreign currency into the Armenian market, which exceeded last year's level by several times, became one of the reasons for the revaluation of the dram. Armen Nurbekyan, Head of Macroeconomic Directorate at Central Bank of Armenia, stated this during a press conference on June 14.
In particular, he said that in April the inflow of funds (transfers through banks, ed. note) amounted to $357 million, which is 2-fold higher than the amount of a year ago. According to Nurbekyan, a significant increase in May was also registered.
At the same time, he noted that the growth was mainly due to transfers of a commercial and other nature. In addition, international visitors, who have been in Armenia for several months, provided the inflow of foreign currency.
It should be recalled that yesterday, during the meeting of the NA Standing Committee on Financial- Credit and Budgetary Affairss, Chairman of the Central Bank of the Republic of Armenia Martin Galstyan, in response to calls for the need to artificially enter the market, devaluing the existing exchange rate by the Regulator, which may help a certain segment of the business - exporters - he drew attention to the fact that as a result, the general public will pay for such actions. "If we go against our mandate, artificially devalue the dram, then we will face a new wave of inflation which will affect everyone," the head of the Central Bank said.
In the current conditions, he noted the importance of the state's sectoral policy, on the basis of which the most affected sectors that have lost their competitiveness will receive assistance from the state in the form of additional subsidies, tax cuts, etc. A few days earlier, Armenian entrepreneurs issued a statement in which they indicated that the exporters of agricultural products, beverages, as well as the tourism sector, the IT sector and developers, suffered the most from the strengthening of the national currency.
It should be noted that according to the Central Bank of the Republic of Armenia, the net inflow of transfers from individuals accelerated the y-o-y growth in January-April 2022, jumping to 94% from 80% a year earlier, exceeding $394.3 million, which was greatly facilitated by the multiple increase in remittances from Russia, while a year ago, in the same period, the driving force of growth was remittances from the United States. The inflow of transfers from individuals to Armenia accelerated the y-o-y growth in January-April 2022 to 60.2% from 29.1% in January-April 2021, amounting to $918.6 million. A similar acceleration of the uptrend was observed in the outflow of transfers - from 11.8% to 41.6%, with a volume of $524.2 million. The net inflow of transfers from individuals accelerated the y-o-y growth in January-April 2022, jumping to 94% from 80% a year earlier, exceeding $394.3 million, which was greatly facilitated by the multiple increase in remittances from Russia, while a year ago, in the same period, the driving force of growth was remittances from the United States.
At the same time, the inflow of transfers of individuals to Armenia from Russia in January-April 2022 sharply accelerated y-o-y growth from 9.4% to 2.2-fold, reaching $471.6 million. The net inflow of transfers from Russia amounted to $306.1 million over this period, with a sharp acceleration y-o-yl growth from 5.2% to 3.2-fold. And the inflow of transfers from individuals to Armenia from the United States in January-April 2022 significantly slowed down the y-o-y growth from 2-fold to 20%, amounting to $199.1 million, which was also observed in the dynamics of the net inflow of transfers from the United States - a sharp slowdown in growth from 3-fold to 5.8 %, with a volume of $115.2 million.
The share of Russia in the inflow in January-April 2022 increased to 51.3% from 37.9% in January-April 2021 (against 51% in January-April 2019), and began to decrease in the outflow - from 32.7% to 31.6 % (against 38.7% in January-April 2019). And the share of the United States in the inflow, on the contrary, decreased year-on-year from 28.9% to 21.7% (against 15.3% in January-April 2019), while increasing in the outflow from 15.4% to 16% (against 18.8% in January-April 2019).
It should be noted that the March forecast of the Central Bank of the Republic of Armenia foreshadowed a decline in the net inflow of remittances in dollar terms by 20% for 2022 (against 54% growth in 2021). The Central Bank conditioned its forecast on the foreseeable economic downturn in Russia and a tangible decrease in the dollar income of seasonal workers. The Central Bank also worsened its forecast for GDP growth for 2022 from the previous 5.3% to an updated 1.6% (against 5.7% growth in 2021). According to the March forecast of the Central Bank of the Republic of Armenia, the ratio of transfers of individuals to GDPwill decrease in 2022 from 8.9% to 6.7%, continuing to decline further to 4.8% in 2024.The Central Bank in this forecast report reiterated that remittances from the United States will slow down growth.
