Tuesday, September 3 2024 16:44

ArmInfo.Armenia's gross international reserves (GIR) decreased by 17.3% annually, or $715  million by August 2024 reaching to $3.411 billion. A year earlier, there was an increase of 16.3% or $580 million.

This trend shows a  continued move away from the historical maximum of $4.2 billion  recorded in August 2023, according to data from the Central Bank of  the Republic of Armenia. The lion's share of the GIR - $3.404 billion  consists of external assets in foreign currency, and the share of SDR  in the IMF amounted to $7.8 million. According to the financial  regulator's report, on an annual basis (from July 2024 to July 2023),  external assets in foreign currency decreased by 16.6%, and the share  of SDR in the IMF decreased by 83.1%. A year earlier there was an  increase in external assets in foreign currency by 15.8% and a  slightly larger decline in the share of SDR in the IMF by 88.2%. Over  the 7 months of 2024, the GIR decreased by 5.3% or $191.1 million  compared to a small growth of 0.3% or $14 million in the first 7  months of 2023. 

This was triggered by a similar decline in external assets in foreign  currency by 5.5%, along with a 15.6- fold increase in the share of  SDR in the IMF. A year earlier, for 7 months of 2023, the components  of the GMR also showed mixed trends. External assets in foreign  currency were slightly down by 0.6%, and the share of SDR in the IMF  grew by 7.4 times. In July 2024 alone, the GMR growth rate slowed  from 4.2% to 1.7%, with an absolute increase of $56.7 million  compared to growth of $216.5 million in July 2023.  Similar dynamics  were observed for external assets in foreign currency with growth  slowing from 4.6% in June to 1.7% in July. 

At the same time, the share of SDR in the IMF, which decreased by  58.3% in June, only increased by 1.3%.  in July. A year earlier, in  July 2023, there was also an acceleration in the growth of GMR from  4.3% to 5.5%, supported by the acceleration of growth in external  assets in foreign currency from 4.4% to 4.6%.  Additionally, there  was a shift in the trend of the share of SDR in the IMF from a 26.3%  decline to a 5.2- fold growth. Meanwhile, referring to the data from  the Central Bank of the Republic of Armenia, ArmInfo analysts find it  noteworthy to draw attention to the fact that during the first half  of 2024, the Central Bank only intervened in the foreign exchange  market in April-June, totaling $256.5 million. These operations were  solely purchase operations (in April - $20 million, in May - $136.5  million and in June - $100 million). 

In comparison, it is worth noting that a year earlier, in the first  half of 2023, the Central Bank only intervened in the foreign  exchange market by purchasing, but then the volume was much higher at  $781.2 million and operations were carried out in all months except  January. A year ago, this was accompanied by a strengthening of the  dram to AMD 387.63 / $ 1 by June, while this year there was a  devaluation to AMD388.87 / $ 1 by June. Compared to the rate in  December 2022, there has been a strengthening (from AMD393.50  / $  1). It should be noted that Armenia's gross international reserves  (GIR) decreased by 12.4% or $510 million in 2023, totaling $3.602  billion, while in 2022 there was an increase of 27.3% or $882  million, reaching $4.112 billion. In particular, external assets in  foreign currency decreased by 12.3% to $3.601 billion, with a 92%  decline in the share of SDR in the IMF to $0.5 million. In 2022 there  was an increase of 28.4% in the former and a decline of 81.3% in the  latter. 

It is worth noting that in 2023, both the GIR and external assets in  hard currency reached a new record high in August - $4.220 billion  and $4.217 billion, respectively. The historical maximum of the SDR  share in the IMF was recorded two years earlier at $178.2 million in  August 2021. The share of bank gold in Armenia's GMR was reset to  zero back in December 2003.  Recall that in June 2024, the IMF  Council, having completed the third review under the stand-by  agreement (SBA) with Armenia. They opened access to 18.4 million SDR  (about $24.5 million) for the country, bringing the total amount to  73.6 million SDR (about $97.7 million).