YEREVAN, June 27. /ARKA/. Armenia’s Central Bank is not planning to make changes to or revise its current regulatory framework designed for local commercial banks, the regulator’s press service said in response to ARKA News Agency’s inquiry about whether it was planning to toughen prudential requirements for banks, particularly, the liquidity ratio because of the large inflow of non-resident funds.
“We, at the Central Bank are having ongoing discussions in the context of banking regulations and guidelines. Possible directions of revision of regulatory requirements are different, including factors relating also to addressing additional risks from non-residents,” the Central Bank said.
It said also that it reviewed the residency as a liquidity risk factor in the stress testing section of its report on financial stability before the influx of foreign nationals in 2022.
In response to the question about what risks the regulator sees for the country’s banking system due to the unprecedented inflow of non-residents’ funds, the regulator again cited its Financial Stability Report 2022 which says that banks have quite large liquidity reserves to withstand various liquidity risk scenarios, including a possible outflow of non-residents’ funds.
Earlier Forbes.ru wrote with reference to the press service of the Armenian regulator that the Central Bank of Armenia was thinking about tightening the prudential requirements for the local banks amid the unprecedented inflow of non-resident funds.
According to the article, the matter concerns the higher ratio of short-term liquidity coverage, defining the volume of highly liquid assets, which a bank should have at its disposal to cover the unplanned increased outflow of funds from accounts and deposits. The Central Bank specified that now it has the same approach to residents and non-residents individuals: the outflow rate for their accounts and deposits is set at 10%.
Earlier this June, Chairman of the Central Bank of Armenia Martin Galstyan stated that the total volume of non-residents’ deposits in Armenian banks stood at AMD 1.1 trillion. As of March 31, 2023, the volume of deposits of individuals stood at AMD 706bln, and this index has doubled in comparison with the same period of the last year.
According to the Central Bank, private trans-border money transfers sent to Armenia via banks in the first quarter of 2023 totaled about $1.6bln, up from $560.1mln in the first quarter of 2022. Money transfers from Russia totaled $1.2 billion, compared to about $239 million in the same period last year. Money transfers from the USA to Armenia totaled $143.4 mln against $142.9 mln in the first quarter of the previous year. -0-
