Armenia’s total debt reaches $4.2 billion

29.08.2012 20:07
Armenia’s total debt reaches $4.2 billion

YEREVAN, August 29. /ARKA/. At the end of July Armenia’s total public debt stood at $4.252 billion, Armenia’s chief treasurer Atom Janjughazian, told a news conference today. He said the country’s foreign debt stood at $3.708 billion, of which $3.1 billion were owed by the government and $608 million by the Central Bank. The domestic debt in the first quarter of this year amounted to $544 million, he said.

Mr. Janjughazian said the size of foreign debt making around 46% of the GDP, poses no risks to the country's economy, as the government has enough revenue to service the debt.
Asked whether the state debt of the country may swell further to half of the GDP Mr. Janjughazian said this option could not be ruled out. He reminded that under the law  if the government’s total debt is within 50-60% of the GDP, budget deficit should not exceed 3% of GDP.
Asked also whether Armenia suffered losses  from manipulation with Libor rates, blamed on a number of leading western banks, the chief treasurer said only a small portion of Armenia’s foreign debt is tied with Libor rate, specifically, Armenia’s $500 million debt to Russia, which makes only 13.4% of the total foreign debt.

The Russian loan was provided at preferential LIBOR rate plus 3% to support Armenia’s economy during the crisis. Janjughazian  said  the only risk in terms of debt management is fluctuation of the exchange rate of the national currency, as the government’s  funds are kept in AMD.
UK’s Barclays’ Bank chief executive Bob Diamond resigned in July after the bank paid around $452 million in penalties for manipulating the Libor rate, which is determined by averaging the rate several large banks report that they can borrow at each day. Barclays reported that it was able to borrow at artificially low rates in order to not appear to be struggling during the heart of the financial crisis in 2008.  Other banks - Royal Bank of Scotland, Lloyds Banking Group, Citigroup, HSBC, UBS  and  Deutsche Bank were also implicated in the scandal. Some legal firms have filed lawsuits on behalf of their clients seeking compensations. -0-


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