Central Bank of Armenia to introduce norm of general orders of exchange

Central Bank of Armenia to introduce norm of general orders of exchange
ARKA, 15.03.2010

Central Bank of Armenia will introduce the norm of general orders of currency instead of the abolished special economic standards on the same day.

This was said by the head of the policy of the financial system and financial stability of the Central Bank of Armenia Vahe Vardanyan.

"On April 26 a special economic standard will be considered null and void, and instead the second more comprehensive standard will be accepted including limitations not only for long, but also for short currency position," he told reporters on Thursday.
In this regard, Vardanyan explained that at the end of the third quarter of last year, it was decided to implement in Armenia the special economic standards, which until then had never acted.

According to him, this was done in order to limit the long currency positions of banks, so that they could not have more assets denominated in dollars, than the dollar liabilities.

Immediate implementation of the logic of both standards stemmed from the need to limit the ability of banks to have a long currency position and the implementation of some speculation in the currency market.

"In our view, this could create negative currency expectations in the economy. We managed to get a 7% norm for a long position, and then the meaningless speculative motives turned out to be meaningless and significantly reduced in the market," he said.

"However, based on the situation, the Central Council may take appropriate action on mitigation or tightening of the norm," he added. –0-