Monday, January 9 2023 19:30

ArmInfo.Armenia's gross international reserves (GIR) decreased in November 2022 by 3.2% or $115.1 million (against a 5.5% decline in November 2021), amounting  to $3.518 billion, thereby continuing to move down from the  historical maximum recorded in September. In parallel with this, the  y-o-y growth of gross international reserves slowed down  significantly - from 33% to 16.2% (or by $491.7 million in November  2022 compared to November 2021).

The growth rate for 11 months of  2022 also slowed down noticeably - to 9% from 15.7% for 11 months of  2021. This is evidenced by the data of the Central Bank of the  Republic of Armenia.

In particular, in November 2022, the reduction of gross international  reserves was due to a 31% decline in foreign assets in hard currency  to $2.496 billion, with an increase in the share of SDR in the IMF by  21.7% to $23.2 million, while a year earlier both had almost the same  decline - 5.5-5.9%.

It is worth noting that external assets in hard currency continued to  move down from the all-time high recorded in September, and the share  of SDR in the IMF is too far from the August 2021 record level of  $178.2 million.

In January-November 2022, the slowdown in the growth of gross  international reserves was provoked by a reversal of the trend of  external assets in hard currency to a downward 22% from an upward  13.8% over 11 months of 2021, as well as a significant deterioration  in the dynamics of the share of SDR in the IMF to 29.4% decline from  6.7-fold growth in 11 months of 2021. the y-o-y trend also shows a  similar reversal (November 2022 to November 2021): external assets in  hard currency from 32.3% growth to 15.8% and the share of SDR in the  IMF from 69.3% growth to 61.3 % decline.

During the 11 months of 2022, the growth of gross international  reserves and external assets in hard currency has been outlined since  April, reaching a historical maximum in June, with a further monthly  setting of a new record level in July-September. And the share of SDR  in the IMF showed growth in March (by 65.3%) and October-November  alone (by 23%).

In early May 2022, the Executive Board of the International Monetary  Fund (IMF) decided to provide Armenia with 25.716 million SDRs (about  $35 million) under the Stand-By Agreement (SBA), as a result of which  the total amount of payments under the program will be 308.8 million  SDRs (about $415 million).  The IMF report indicated that the  decision was made by the Executive Board of the Fund without  convening official discussions, completing the review of the sixth  and final SBA review, thereby allowing the authorities to raise the  abovementioned amount. The same report noted that the performance of  the three-year standby agreement (SBA) remained strong despite a  number of internal and external shocks.  Much later, on December 13,  2022, the IMF approved a three-year standby loan program for Armenia  in the amount of about $171.1 million (128.8 million SDR), which is  about 100% of the RA quota in the IMF.  From the approval of the  program in December, $24.4 million (18.4 million SDRs) becomes  immediately available to Armenia, and the rest of the amount will be  provided after final reviews of six semi-annual periods. This reserve  program, according to the Armenian authorities, is considered  preventive and will help insure the balance of payments against shock  consequences, as well as stimulate the efforts of the authorities in  terms of reforms.  It should be noted that in 2021, Armenia's gross  international reserves (GIR) increased by 23% or by $599.4 million  (against an 8.2% decline in 2020 and a pre-Covid 26.1% growth in  2019), reaching $3.230 billion. External assets in hard currency in  the context of the gross international reserves increased by 22.1% to  $3.197 billion, and the share of SDR in the IMF jumped 3.7-fol to  $32.8 million, while in 2020 external assets in hard currency were at  8.3% decline, and the share of SDR in the IMF showed a relatively  modest increase of 45.5%, against the pre-Covid growth in 2019 of the  first one by 26.2% and the second one by 3.2%. The share of banking  gold in Armenia's gross international reserves was set to zero in  December 2003