Monday, October 2 2023 12:58

ArmInfo.Armenia's gross international reserves (GIR) accelerated in y-o-y growth for Jan-Aug  2023 from 12.6% to 16.5% (i.e. increased by $598 million) and updated a historical maximum at $4.219 billion (against previous maximum at $4.126 billion in July this year and $4.112 billion in December 2022), according to the data of the Central Bank of the Republic of Armenia.

Within gross international reserves, the lion's share in$4.216  billion falls on external assets in hard currency, which also reached  a new historical maximum , and the share of SDR in the IMF dropped to  $1.9 million, far removed from the historical maximum of $178.2  million in August 2021. According to the regulator's report, by  September of this year, external assets in hard currency increased by  17.1% per annum, and the share of SDR in the IMF decreased by 91%,  which was observed a year earlier in the same period, when the growth  of the external assets in hard currency by 18.6% was accompanied by a  decline in the share of SDR in the IMF by 88.5 %.

In Jan-Aug 2023, SDRs increased modestly - by 2.6% or $107.8 million,  which was accompanied by a similar increase in external assets in  hard currency (by 2.6%) and a decline in the share of SDR in the IMF  by 69.5%, while a year earlier, over 8 months, the growth of the GIR  was higher - 12.1% (or by $391.7 million) against the backdrop of  almost the same increase in external assets in hard currency (by  12.6%) and a reduction in the share of SDR in the IMF by 37.4%.

In Aug 2023 alone, GIR growth slowed from 5.5% to 2.3%, increasing in  absolute terms by $93.8 million (against July growth of $216.5  million). Similar dynamics were observed for external assets in hard  currency - a slowdown in growth from July 4.6% to August 3.4%. At the  same time, the share of SDR in the IMF during the reporting month  decreased by 96%, after a July 5.2-fold increase. A year earlier, in  August 2022, there was an unnoticeable slowdown in the growth of  gross domestic product - from 2.8% to 2.1%, due to the same slowdown  in the growth of external assets in hard currency - from 2.9% to  2.2%, and the acceleration of the decline in the share of SDR in the  IMF from 13.5% to 16%. 

It should be noted that by the end of 2022, Armenia's gross  international reserves (GIR) reached a record level of $4.112  billion, which was then slightly exceeded in 2023 in July and much  more noticeably in August. In 2022, GIR increased by 27.3% or $881.8  million (versus 23.5% growth in 2021). Within GIR, external assets in  hard currency also reached a record level of $4.108 billion,  accelerating in growth from 22.7% to 28.5%, which then reached a new  historical maximum in August 2023. At the same time, the share of SDR  in the IMF dropped to $6.2 million, with a reversal of the y-o-y  dynamics from a 3.7-fold increase towards a decline of 81.3%, thus  moving further away from the record high of $178.2 million in August  2021. The share of banking gold in   Armenia's gross international  reserves was set to zero back in December 2003. 

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 Fund's  Executive Board took the   decision 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 high   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.  Since the   approval  of this program in December, $24.4 million has been   immediately  available to Armenia, and the rest of the amount will be provided  after final reviews of six semi-annual periods. According to  the  Armenian authorities, this reserve program 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.  In mid-April 2023, it was announced that about   $24.8 million of the Stand-by loan would become available to Armenia   after the meeting of the IMF Council in mid-June this year.