YEREVAN, September 8. /ARKA/. The IMF Executive Board approved a 36-month precautionary SBA on December 12, 2022, which supports the authorities’ efforts to preserve macroeconomic, financial, and fiscal stability and to advance their homegrown economic program, ' Head of Middle East and Central Asia Department at the International Monetary Fund (IMF), said in an exclusive interview with ARKA news agency.

He recalled that the e first review of the program was successfully completed in June, and discussions on completion of the second review will take place in the Fall.

On the specific objectives of the IMF-supported program: Azour named the following: 

- Preserving macroeconomic, financial, and fiscal stability requires:

(i) Fiscal policy that remains appropriate for the phase of the economic cycle and supports Armenia’s development spending needs, is anchored by the fiscal rules, and will keep public debt moderate;

 (ii) monetary policy that is consistent with steering inflation toward the CBA target of 4 percent over the medium term;

(iii) exchange rate flexibility and maintaining healthy reserve buffers; and (iv) further strengthening of the regulatory and supervisory framework to keep financial sector risks in check.

- A higher, export-oriented, and more inclusive growth could be achieved with a package of structural reforms that aims to facilitate trade, diversification, and FDI; develop infrastructure and connectivity; strengthen governance; improve the business environment; foster employment and social protection; advance digitalization; and build resilience against climate risks. Reforms in these areas complement efforts supported by other development partners.

He said the Armenian authorities continue to treat the SBA as precautionary, which is appropriate, given the availability of financing and ample international reserves. He added that in the event of an adverse shock, the SBA aims to provide a positive market signal, catalyze support from other International Financial Institutions, and serve as insurance against potential external financing needs. -0-