YEREVAN, July 8. /ARKA/. The supply of foreign currency is growing in Armenia’s foreign exchange market, Armen Ktoyan, a member of the Board of the Central Bank of Armenia, stated in an interview with CivilNet.
According to him, the Central Bank does not aim to manage the exchange rate or achieve any specific exchange rate target, as the regulator’s primary objective is to ensure price stability.
“If we look at the Central Bank’s objectives, price stability is key. Managing the exchange rate or setting a specific exchange rate target is not the Central Bank’s function, and this is logical,” Ktoyan noted.
He emphasized that the Central Bank acts in cases where the foreign exchange market is experiencing a one-sided movement that significantly threatens market equilibrium.
Ktoyan noted that the increase in foreign currency supply is related, in particular, to the expansion of exports of certain services, increased demand for tourism services, capital inflows, and non-resident interest in Armenian bonds.
According to him, in the first five months of this year, the inflow of foreign currency into Armenia through the banking system amounted to approximately $2.8 billion, compared to $2.3 billion in the same period last year and approximately $2 billion two years earlier.
“The outflow is approximately $1.6-1.7 billion. That is, it is growing at almost no rate compared to the inflow. This means that the supply of foreign currency on the market is increasing,” Ktoyan said.
Responding to a question about the main sources of inflow, he noted that funds come from Russia, among other sources, but not exclusively.
“There is significant activity among non-residents in purchasing bonds. If Armenian capital and financial market instruments become attractive to foreign investors, this is accompanied by an increase in the inflow of foreign currency and its supply,” Ktoyan stated.
