YEREVAN, December 26. /ARKA/. The raising of the reserve requirement in foreign currency for commercial banks will deprive the country’s economy of some 100 billion drams, the ex-head of the central bank Bagrat Asatryan said at a news conference on Thursday.
“The respective central bank decision will make banks reserve an additional of about 100 billion drams that will be withdrawn from the economy”, Asatryan said.
In order to stabilize the forex market situation and scotch currency speculations, Armenia’s central bank raised, on December 17, the reserve requirement in foreign currency for commercial banks from 14% to 24%. Later, on December 20, the regulator lowered the requirement down to 20%. The Lombard repo rate has been raised from 8.25 to20%.
This means central bank has provoked an increase in the value of money for banks while taking its stabilizing measures, according to Asatryan. The following conditions are created for the next year – first, money is not cheap for the economy, and the second, 100 billion drams are withdrawn from the economy due to increased requirement, the ex-head of the central bank said.
In general, according to the expert, raising the requirements sharply make these tools lack efficiency.
The central bank has no other tool like this, which means new approaches need to be developed starting from now, Asatryan said. ($1 – 459.3 drams). –0-
