Banking in Armenia
Encyclopedia
The Central Bank of Armenia
is charged with regulating the money supply, circulating currency, and regulating the commercial banks of the country. Commercial banks in Armenia include HSBC Bank Armenia
, Ameria-Cascade, Ardshinbank, Armagrobank, Armeconombank, Armimplexbank, Arminvestbank, ArmSwissBank, Bank Armcommunication, Bank “Capital,” Bank “Haykap,” Central Bank of Armenia
, Commercial Bank “Ardana,” Commercial Bank Anelik, “Gladzor” Joint Stock Commercial Bank, Masis Commercial Bank, and the State Specialized Savings Bank of the Republic of Armenia. Leading foreign banks include: VTB (Russia), ProCredit Bank
(Germany), and Mellat Bank (Iran).
The International Monetary Fund
(IMF) has been concerned about the direction of policy taken by the Central Bank of Armenia and the slow pace of financial reform. Armenia’s financial sector is overbanked and beset with nonperforming credits, mainly to large state enterprises. Armenia has been a model reforming country among the former Soviet republic
s, and multilateral creditors are worried that public pressure may now force the government to loosen monetary and fiscal policies.
It was revealed in January 1997 that the central bank’s credits to finance the government’s budget gap has surpassed their $100 million limit in the first 10 months of 1996. The bank has been forced to intervene in the domestic markets, selling foreign exchange reserves
to maintain the stability of the dram. The IMF reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $141.6 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $310.3 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 19.4%.
Armenia
Armenia , officially the Republic of Armenia , is a landlocked mountainous country in the Caucasus region of Eurasia...
is charged with regulating the money supply, circulating currency, and regulating the commercial banks of the country. Commercial banks in Armenia include HSBC Bank Armenia
HSBC Bank Armenia
HSBC Bank Armenia was established as a closed joint stock company under the name “Midland Armenia Bank JSC” in 1996 and has been renamed into “HSBC Bank Armenia cjsc” in 1999...
, Ameria-Cascade, Ardshinbank, Armagrobank, Armeconombank, Armimplexbank, Arminvestbank, ArmSwissBank, Bank Armcommunication, Bank “Capital,” Bank “Haykap,” Central Bank of Armenia
Central Bank of Armenia
The Central Bank of Armenia is the central bank of Armenia with its headquarters in Yerevan. The CBA is an independent institution responsible for issuing all banknotes and coins in the country, overseeing and regulating the banking sector and keeping the government's currency reserves...
, Commercial Bank “Ardana,” Commercial Bank Anelik, “Gladzor” Joint Stock Commercial Bank, Masis Commercial Bank, and the State Specialized Savings Bank of the Republic of Armenia. Leading foreign banks include: VTB (Russia), ProCredit Bank
Procredit Bank
Procredit Bank is a member of the Procredit Group, which owns majority stakes in 19 countries on the continents of The Americas, Africa, and Europe. Procredit Bank is the name of several of the Group's banks in the Eastern European region.-External links:*...
(Germany), and Mellat Bank (Iran).
The International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) has been concerned about the direction of policy taken by the Central Bank of Armenia and the slow pace of financial reform. Armenia’s financial sector is overbanked and beset with nonperforming credits, mainly to large state enterprises. Armenia has been a model reforming country among the former Soviet republic
Republics of the Soviet Union
The Republics of the Soviet Union or the Union Republics of the Soviet Union were ethnically-based administrative units that were subordinated directly to the Government of the Soviet Union...
s, and multilateral creditors are worried that public pressure may now force the government to loosen monetary and fiscal policies.
It was revealed in January 1997 that the central bank’s credits to finance the government’s budget gap has surpassed their $100 million limit in the first 10 months of 1996. The bank has been forced to intervene in the domestic markets, selling foreign exchange reserves
Foreign exchange reserves
Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...
to maintain the stability of the dram. The IMF reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $141.6 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $310.3 million. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 19.4%.