2024-02-08 20:18:50
Armenian banks concluded the last year with a high capital and liquidity reserve, which is a necessary prerequisite for guaranteeing the resilience of the financial system against possible future shocks. Currently, the financial system has all the prerequisites for further sustainable development, financing of the economy and quality service. Hovhannes Khachatryan, Deputy Chairman of the RA Central Bank, said this in an interview to “Armenpress”.
In the interview, he referred to the problems of the financial system of the past year, indicators of inflation and economic growth, loans and deposits, effects on the dram exchange rate, forecasts for the current year and other topics.
– Mr. Khachatryan, in 2023, mainly what factors had a significant impact on the RA financial system, both positively and negatively? To what extent were the emerging problems solved, and what problems do you not rule out in the financial system this year?
– Despite all difficulties, 2023 can be considered a year of stable development of the financial system. The main challenge was related to geopolitical and regional events.
It is important to emphasize that the banks ended 2023 with a high stock of capital and liquidity, which is a necessary precondition to guarantee the resilience of the financial system against possible future shocks. In addition, sufficient profitability was recorded in the banking sector, providing an additional impetus to both the expansion of capital stock and normal lending to the economy. As for 2024, the financial system has all the prerequisites for further sustainable development, financing of the economy and quality service.
– How much was the recorded inflation in the republic last year? What was the reason for that indicator and how does it compare to the previous year? What are your predictions for this year?
-According to official statistics, in December 2023, inflation was recorded in the Republic of Armenia, which was 0.6 percent on a 12-month basis. In its discussions, the Board of the Central Bank has repeatedly noted that deflationary effects transferred from the external sector are significant in recent inflation developments. They are manifested mainly in terms of imported food products as well as non-food products. Thus, for example, as of December 2023, the prices of imported food decreased by 7.9 percent, and in the non-food part, we have inflation of 0.1 percent. This also reflects a gradual decline from the very high price levels of previous years. Post-pandemic, we had a situation where prices in international commodity markets skyrocketed due to disruptions in global value chains, further exacerbated by increased geopolitical tensions. As a result of the gradual restoration of value chains and the implementation of restrictive monetary policy in the main partner countries, prices in the international markets gradually decreased, which was also reflected in the RA inflation indicators of 2023. The devaluation of the Armenian dram observed in 2022 against the currencies of partner countries also had a significant impact on the reduction of inflation.
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