Armenia ends 2016 with firm national currency – economist

17.01.2017 14:12
Armenia ends 2016 with firm national currency – economist

YEREVAN, January 17. /ARKA/. This is the second consecutive year Armenia stands out from former Soviet republics for its monetary policy and stable national currency, Tatul Manaseryan, head of Alterantive think tank, told journalists on Monday.

“The financial block of Armenia was quite balanced in 2016 – the motion of the national currency was predictable and stable, and Armenia is single among the post-Soviet countries, which keeps lead for already second year,” Manaseryan said.

He stressed that Armenia’s banks ended the year with good capital adequacy and demand for loans explaining this success mostly by bank mergers, which have reduced the number of Armenian banks from 21 to 17. .

“There has been nothing like this over the entire history of the independent Armenia – never before banks here have issued securities to build up their capital,” he said. “This is a new phenomenon for Armenia, which shows some increase in confidence in the system not only inside, but also outside the country.”

In particular, Armenian banks’ securities have been bought not only by the European Bank for Reconstruction and Development, which is a shareholder of at least two Armenian banks, but also other organizations.

The economist said that consolidation of banks, in terms of economy, is aimed at ensuring stability to the system. He stressed that expectations from the banking sector are far higher.

“Now banks should be more integrated in economy and their activities should contribute to its development and they will be able not only to ensure stability, but also to bare certain risks,” he said.

In late 2014, the Central Bank of Armenia imposed a new requirement on the country’s commercial banks obliging them to increase their capital to AMD 30 billion instead of the AMD 5 billion required before.

After that, banks started building up their capitals resorting also to mergers and takeovers. As a result, of 21 banks in Armenia only 17 remained. --0---

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