ANELIK BANK FACES NO PROBLEMS WITH LIQUIDITY AMID NATIONAL DRAM HYPER-DEVALUATION DUE TO FINANCIAL SUPPORT CREDIT BANK S.A.L.
by Karina Melikyan
Saturday, December 20, 16:43
Anelik Bank faced no problems with liquidity amid the national dram
hyper-devaluation due to the financial support of its owner, Credit
Bank S.A.L. (Lebanon), Nerses Karamanukyan, Chairman of Anelik Bank
Board, told ArmInfo.
“The latest uneasy situation in the financial market of Armenia is
characteristic to the countries with transitional economy, but the
Central Bank managed to restrain the speculative deals. Anelik Bank
like the other Armenians banks could not but feel anxiety over the
situation, but it did not affect the normal activity of the bank,
which continued to serve its customers on a full scale,” Karamanukyan
said. He spotlighted the financial assistance by the bank’s owner
in that difficult period. “Having rich experience of working in
instable situation in the Lebanese and Russian financial markets,
Credit Bank S.A.L. also consulted Anelik Bank over the situation. This,
along with the systematic and reasonable policy of the Central Bank,
helped the Bank and the financial market, in general, overcome that
destabilization,” Karamanukyan said.
To note, from Oct through Dec 17 AMD dropped against USD by almost
45%. It was hyper devaluation of the national dram. On 17 December,
the average rate reached 570 AMD/1 USD, which saw a real panic. Food
prices began to grow, as the national currency devaluated. Sugar,
flour, and other prices rose drastically. Many food and other stores
refused to sell products since they did not know at what price to
sell their products.
Howeverm on 17 December, the Central Bank toughened the compulsory
reservation standards for the raised funds in foreign exchange from
12% to 24% and already on 18-19 December, the dram appreciated by 25%.
Before that, the CB announced on 8 December that it launches daily
interventions to restore the balance in the exchange market and soften
currency fluctuations. The interventions will last till the end of
2014. Dec 8-17 the CB sold $42mln: $6mln a day Dec 8-12 and $4mln a
day Dec 15-17. On December 18-19, the $4 million daily interventions
were not demanded by the banks. Nevertheless, the banks carried out
forex deals with each other on 18-19 December ($4 million and $5.6
million, respectively). This reduced the interbank rate from 480.12
to 458.01 AMD/1USD.
On 1-5 December, the foreign exchange interbank market showed an
unprecedented maximum – $59.3 million. Forex transactions on NASDAQ
OMX Armenia from June up to 19 December totaled $397.150 million
with the exchange rate rising from 407.14 AMD/1 USD to 560 AMD/1 USD
and then falling to 442.44 AMD/1 USD. Nearly $117 million of total
transactions were made in November. In the period from 1 up to 19
December, transactions were made only trice: on 1 Dec – $3.5 million,
on 10 Dec – $100,000 and on 19 December – $450,000, with the exchange
rate rising from 438.62 AMD/1 USD to 461 AMD/1 USD and falling to
442.44 AMD/1 USD. In the retail foreign exchange market of Armenia on
20 December the exchange rates (purchase/sale) at the swap points were
as follows: 435/465 AMD/1 USD, 525/570 AMD/1 EUR, 7/8.15 AMD/1 RUR.
The highest rates at banks on 20 December were as follows: 454/458
AMD/1 USD, 544/565 AMD/1 EUR, and 7.62/7.86 AMD/1 RUR.
In October 2013, the majority shareholder of Anelik Bank, Credit Bank
S.A.L., Lebanon, became the sole owner of the bank and received the
right to Anelik.RU. Since then, retail lending and SME finance have
become the Bank’s priorities. AnelikRU Moscow branch was alienated
in December 2012 and transferred under management of Credit Bank S.A.L.