Armenia`s gross international reserves go on decreasing

ArmInfo. Armenia's gross international reserves go on decreasing as against the historical record last August, $4.219bln.

Having decreased in November 2023 by 4.7% or $177.4 million (against a 3.2% decline in November 2022), amounted to $3.635 billion. In parallel with this, annual growth slowed down significantly - from 16.2% to 3.3% (or $117.4 million in November 2023 compared to November 2022). The dynamics of GMR for 11 months of 2023 also worsened, turning towards an 11.6% decline from 8.9% growth for 11 months of 2022, or in absolute terms, decreasing by $476.3 million. This is evidenced by data from the Central Bank of Armenia (CBA).

In particular, in November 2023, the reduction in GMR was due to a decline in external assets in hard currency by 3.5% to $3.628 billion, with a decrease in the share of SDR in the IMF by 86% - to $7.2 million, while a year earlier there was 3.3% -th decline of the former with a 22% growth of the latter. It is appropriate to note that external assets in hard currency have moved down from the historical maximum ($4.216 billion in August 2023), and the share of SDR in the IMF is too far from the August 2021 record level of $178.2 million.

In January-November 2023, similar to the dynamics of the gross international reserves (GIR), the trend of external assets in hard currency worsened, turning towards an 11.7% decline from 9.3% growth over the 11 months of 2022, and the share of SDR in the IMF, on the contrary, increased by 17. 2%, reversing last year's 29.4% decline.

On an annual basis (November 2023 to November 2022), the upward dynamics of external assets in hard currency remained, but the pace slowed from 17.8% to 3.8%, in parallel with which the share of SDR in the IMF accelerated in decline from 61.3% to 69%.

During 11 months of 2023, a decline in GIR and external assets in hard currency was observed in January- February and April, after which GIR and external assets in hard currency began to grow monthly, reaching a new record level in August, but since September there has been a monthly downward movement. And the share of SDR in the IMF showed growth only in January (5 times), July (5 times) and October (85 times).

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). In their structure, 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 annual dynamics from an increase of 3.7 times towards a decline of 81.3%, thereby moving further away from the record level of August 2021 of $178.2 million.  The share of bank gold in the SMR of Armenia reset back in December 2003.

On December 12, 2022, the IMF Council approved a three-year Stand-By Arrangement (SBA) agreement for Armenia in the amount of SDR 128.8 million (about $171.1 million) in order to maintain macroeconomic stability, hedge against negative risks and support the structural reform program.

From this moment on, an amount equivalent to 18.4 million SDR (about $24.4 million) immediately became available to Armenia. On June 12, 2023, the IMF Board completed its review of the first review under the SBA standby agreement with Armenia, which resulted in access to SDR 18.4 million (about $24.5 million), bringing the total access amount to SDR 36.8 million (about $49 million). ). Later, on November 7, 2023, the IMF Board completed its review of the second review under the SBA standby agreement with Armenia. Based on the results of this audit, the IMF Council, at a meeting on December 11, 2023, decided to open Armenia's access to 18.4 million SDR (about $24.4 million), resulting in the total amount of access to be 55.2 million SDR (about $73.3 million).