2024-09-27 16:35:24
The Center for Economic Development Initiatives (EDIC) referred to the 2020 by the RA banking system. to the dynamics of the volumes of deposits attracted from residents in January-April.
In April 2020, compared to the end of December 2019, the volume of deposits attracted through RA commercial banks decreased by 2.6%, amounting to around 2.5 trillion drams, while the decrease compared to the previous month was 3.3%. It is interesting to note that in March 2020, compared to February, demand and time deposits in AMD decreased, while demand and time deposits in dollars increased.
The change in the volumes of demand and term deposits in dollars recorded a decrease of 2.7 and 2.2%, respectively, and the growth of the volumes of deposits in dollars was 4.5 and 2.8%, respectively.
Figure 1. Volumes of demand and term deposits in drams and foreign currency drawn from residents by the RA banking system at the end of 2019 and January-April 2020 (billion drams)
This phenomenon is explained by two circumstances:
1. Panic, which is explained by the fact that in March (especially starting from March 10, 2020) compared to February, the Armenian dram was somewhat devalued, which caused negative expectations among both Armenian enterprises and households, as a result of which the latter AMD deposits have started to be converted into especially foreign currency deposits (a part of it is diverted to cover current expenses).
2. Due to the uncertainty, in March it was difficult to predict how long the epidemic would last and what economic consequences it would cause, and for security, some households increased their dollar deposits, even at the expense of the money kept at home. In the case of enterprises, this can be explained by allowing limited types of economic activities, in which some companies turned money into deposits in order to carry out economic activities.
And as a result of the deepening of the epidemic and the resulting economic impact, in April 2020 compared to March, both demand and time deposits of households in dollars registered a decrease of around 7.2 and 6.2%, respectively.
Time deposits in drams of households registered another 0.6% decrease, amounting to around 574.7 billion drams, while demand deposits increased by 9.5%, amounting to around 202.6 billion drams. This is explained by the fact that the economic impact of the epidemic led to the fact that households began to take time deposits, as well as demand dollar deposits, some of which were converted into drams and transferred to the current dram account, and most of the withdrawn deposits were directed to current needs. and/or to cover expenses.
In the case of enterprises, in 2020 compared to the previous month, the largest drop was recorded in terms of their dollar demand deposits, amounting to 18.9 billion drams (13%), making 134.9 billion drams. Demand and term deposits of enterprises in drams recorded a 1.7 and 3.7% decline, respectively, while their dollar term deposits increased by around 4.6 billion drams in the same period, making 57.9 billion drams. This increase can perhaps be explained by the fact that some of the enterprises, whose activities were stopped, invested their funds in a term deposit in dollars, in order to withdraw them in case of need.
Thus, during the observed period, the volumes of deposits attracted by the commercial banks of RA decreased due to the economic impact of the epidemic. As for the change in annual volumes, compared to December 2019, this change will be solely due to the change in real incomes of households with average and above-average income levels.