YEREVAN, November 3. /ARКА/. The Central Bank of Armenia has tightened liquidity requirements for banks with large, concentrated foreign currency inflows to limit the risk of a potential outflow of funds. This was announced by Central Bank Chairman Martin Galstyan in parliament on Monday during a discussion of the draft state budget for 2027.
According to him, not all funds coming into Armenia from abroad are intended for investment in the country’s economy: some of their owners consider Armenia a place to keep their money.
Galstyan was responding to a question from a member of parliament about the possible consequences of the cessation of large cash inflows from abroad, including for the exchange rate and the construction sector, as well as the concentration of these funds in the hands of a limited number of individuals.
Galstyan explained that when assessing risks, the regulator takes into account the degree of concentration of funds in banks.
Specifically, the Central Bank distinguishes between situations where a large sum belongs to a single depositor and situations where similar funds are distributed among a large number of clients.
“We have significantly tightened requirements in the first case to ensure that banks have adequate liquidity buffers in the event of a possible outflow of funds,” the head of the Central Bank said.
According to him, if the subsequent movement of incoming funds is difficult to predict, banks should not convert them from dollars to drams and use them for lending to the economy. Instead, they should maintain sufficient liquidity in the event of a sudden outflow.
Galstyan noted that to limit such risks, the Central Bank uses regulatory requirements, interaction with banks, and macroprudential tools, including countercyclical buffers.
“In other words, our entire toolkit is aimed at containing this risk. This is precisely what we are doing. Or rather, not just doing it—we have already done it,” Galstyan emphasized.
