Friday, June 30 2023 16:13

ArmInfo. By June 2023, Armenia's gross international reserves (GIR) accelerated y-o-y growth from 4.7% to 19%, increasing in absolute terms by $597.4 million and reaching $3.749 billion, thereby approaching the historical maximum of $4.112 billion recorded at the end of 2022.  About this evidenced by the data of the Central Bank of the Republic of Armenia, according to which in May of this year alone, GIR increased by 3.1% (or by $112 million), while in Jan-May it decreased by 8.8% (or by $363.1 million).

The lion's share in GIR falls on external assets in hard currency- $3.735 billion, and the share of SDR in the IMF amounted to $12 million. According to the regulator's report, external assets in hard currency accelerated in y-o-y growth from 4.4% to 20.3%, and SDR in the IMF, on the contrary, turned the trend from 30.6% growth to 74.2% decline.

For Jan-May 2023, the decline in GIR was accompanied by an almost similar decrease in foreign assets in hard currency by 9.1%, with a sharp increase in the share of SDR in the IMF by 95.2%, which was observed at a more modest pace a year earlier in the same period: a decline in GIR by 2 .4%, with a decrease in external assets in hard currency by 2.9% and an increase in the share of SDR in the IMF by 42%.

At the same time, on a monthly term, GIR reversed its dynamics from a 2.4% drop in April to a 3.1% increase in May, while a year earlier, growth slowed down from 4.4% in April to 2.7% in May. The same trend reversal at the same pace was observed for external assets in hard currency - in May from a 2.4% decline to a 3.3% increase (against a slowdown in growth from 4.5% to 2.8% in May 2022). At the same time, the trend of the share of SDR in the IMF reversed in May from 0.7% growth to 45.1% decline, while a year earlier in May there was an acceleration of the decline from 3.1% to 6.3%. During the first five months of this year, GIR showed growth only in March and May - by a total of $291.5 million, which was It should be noted that by 2023, Armenia's gross international reserves (GIR) reached a historical maximum - $4.112 billion, with a y-o-y growth of 27.3% or $881.8 million (against 23.5% growth in 2021). The external assets in hard currency also reached a historical maximum - $4.108 billion, having increased by 28.5% over 2022, with a decline in the share of SDR in the IMF by 81.3% - to $6.2 million, while a year earlier there was an increase in both, respectively, 22.7% and 3.7-fold. It is worth noting that the share of SDRs in the IMF for 2022 has moved even further away from the record level of August 2021 of $178.2 million. As a comparison, let's take a look at the pre-covid dynamics of 2019: the growth of external assets in hard currency by 26.2% and the share of SDRs in the IMF by 3.2 % ensured the growth of GIR by 26.1%. The share of banking gold in Armenia's GIR was set to zero back in  December 2003. 

It should be noted that 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  announcement indicated that the decision was taken by the Fund's Executive Board without convening formal discussions,

completing the  review of the sixth and final SBA reviews, 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 moment the program is approved 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 assurances of the Armenian authorities, is considered preventive and will help hedge the balance of payments against shock consequences, as well as serve as an incentive for the efforts of the authorities in terms of reforms. In mid-June 2023, the IMF under the new Reserve Program (SBA) provided Armenia with access to 18.4 million SDR ($24.5 million) Stand-by loan, bringing the total amount to 36.8 million SDR ($49 million).