ARKA News Agency presents top 10 events in Armenian financial market in 2017

19.12.2017 16:40
ARKA News Agency presents top 10 events in Armenian financial market in 2017

YEREVAN, December 19. /ARKA/. ARKA news agency has compiled the list of top ten most important events in 2017 in Armenia’s financial sector, which is below.

1. Suspension of soft monetary policy

In March, the Central Bank of Armenia suspended the easing of monetary policy, keeping the refinancing rate at 6%. The regulator had begun to gradually reduce the refinancing rate from the second half of 2015. As a result, it decreased from 10.5% in June 2015 to 6% in February 2017.

2. ArCa and MIR payment systems announced a joint issue of cards

The Armenian Card (ArCa) payment system in cooperation with the National System of Payment Cards of Russia announced in May the issuance of joint payments cards. Their mutual servicing began in July.

3. Online purchase of government bonds

In April, the placement of government bonds was moved from the Central Bank to NASDAQ OMX Armenia. As noted by experts, the move was to make Armenian government bonds visible, understandable and accessible to foreign buyers. Another important innovation was the introduction of online purchase and sale of bonds. This was done to attract individual investors, especially young people.

4. New banknotes

In July, the Central Bank of Armenia announced the transition to new composite banknotes of the third generation. New banknotes will go into circulation on November 22, 2018, when the country will mark the 25th anniversary of the national currency. The existing banknotes will be gradually replaced by new generation banknotes. A new banknote with a nominal value of AMD 2,000 will be introduced, while banknotes with the face value of 100,000 AMD will not be printed anymore because of low demand.

5. Boom of corporate bonds

In the first ten months of 2017 a record amount of stock deals with corporate bonds was registered since 2003. The amount of deals made in January-October 2017 was 9.8 billion drams, which is 2.6 times more than in the same period last year. For comparison, in 2016 a total of 5.9 billion drams worth transactions with corporate bonds were made. In 2015 - 2 billion drams.

6. Reorganization of the Panl-Armenian Bank into a fund

In August, the Pan-Armenian Bank was reorganized into a fund. The process was initiated by the Central Bank to ensure the efficiency and flexibility of the bank’s tasks. The fund has a specialized fund manager, whose powers, like that of the shareholder, are exercised by the authorized body of the Armenian government.

7. FEAS office moved to Yerevan

The head office of the Federation of Euro-Asian Stock Exchanges (FEAS) was moved from Turkey’s Istanbul to the Armenian capital Yerevan. The decision was taken unanimously at the FEAS General Assembly in Tehran on May 16. It is noteworthy that since its inception in May 1995, the head office of FEAS had been in Istanbul. The organization's mission is to promote cooperation and development of the capital market in the Eurasian region (Europe, Asia, the Mediterranean).

8. Current forecasts of Fitch and Moody's

The Moody's Investors Service confirmed the long-term issuer rating and the unsecured debt obligations of Armenia rating at the level of B1, the forecast is "Stable". The agency maintained the rating at B1 level in conditions of reliable economic and financial management through effective fiscal and monetary policy, despite the high debt burden.

9. Growth of bank capital

Since January 1, 2017, Armenian banks started working under the new minimum capital requirement - 30 billion drams instead of the previous 5 billion. Over the previous two years the capital of banks increased by more than 191 billion drams or about $398 million and as a result of mergers their number decreased from 21 to 17.

10. Protection of borrowers and guarantors

In September, the Central Bank of Armenia introduced new requirements designed to protect the interests of guarantors of borrowers, which became effective from October 1, 2017. The change was carried out proceeding from the need to protect the interests of guarantors. According to numerous reports, credit organizations, before concluding an agreement with the guarantor, in most cases failed to explain to them the possible risks, their rights and obligations under the contract. -0-

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