10:51, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. U.S. Senators on Sunday released the details of a $118.2 billion bipartisan aid proposal for Ukraine, Israel and the southern U.S. border, after months of negotiations, CNBC reports.

The bill requests $60.1 billion for Ukraine aid, $14.1 billion for Israel and $20.2 billion to improve security at the U.S. border. It also includes smaller pockets of funding for humanitarian assistance in war-torn regions, and defense operations in the Red Sea and Taiwan.

U.S. President Joe Biden initially proposed a more than $105 billion aid package in October. The Senate’s new deal roughly matches the funding proportions Biden had requested for Ukraine, Israel and Taiwan.

The central difference in the new proposal is over $13 billion more in border security funding, which was a major point of contention in the months-long Senate talks.

Republicans have criticized the Biden administration for its handling of the border, which has seen record numbers of migrant crossings in recent months. Democrats have countered that the president needs further executive authority to institute more aggressive border security.

The president said Sunday that he supports the Senate’s bipartisan proposal, including the term that gives him “new emergency authority to shut down the border when it becomes overwhelmed.”

“I urge Congress to come together and swiftly pass this bipartisan agreement. Get it to my desk so I can sign it into law immediately,” Biden said.

Senate Majority Leader Chuck Schumer, D-N.Y., said a vote is scheduled for the bill on Wednesday.

Despite the backing of top Democrats, the bill faces uncertain prospects in both the Senate and the House of Representatives, where Republicans hold a majority. Republican House Speaker Mike Johnson said on Sunday that the Senate deal would be “dead on arrival” if it reaches his Republican-controlled chamber.

 08:55, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS.  The Armenian banks concluded the last year with high capital and liquidity reserves, which are prerequisites 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 the economy, and providing quality service, Hovhannes Khachatryan, Deputy Chairman of the Armenian Central Bank, told Armenpress.

 In the interview, Khachatryan addressed the problems of the financial system in the past year, discussing indicators of inflation and economic growth, loans and deposits, the effects on the dram exchange rate, forecasts for the current year and other topics.

 - Mr. Khachatryan, what factors primarily influenced the financial system of Armenia in 2023, both positively and negatively? To what extent were the challenges addressed? Which problems do you rule out from the financial system this year?"

– Despite all the difficulties, we can consider the previous year a period of stable development for the financial system. The main challenge was related to geopolitical and regional events. We should note that the Armenian banks concluded the last year with high capital and liquidity reserves, which are prerequisites for guaranteeing the resilience of the financial system against possible future shocks. In addition, the banking sector recorded sufficient profitability, providing an additional impetus for both the expansion of capital stock and regular lending to the economy. As for 2024, the financial system has all the prerequisites for further sustainable development, financing the economy and ensuring quality service.

 -What was the recorded inflation in the Republic last year, and what is the reason for this indicator? How does it compare with the previous year, and what are your predictions for this year?

-According to official statistics, in December 2023, deflation of 0.6 percent per year was recorded in the Republic of Armenia. In its discussions, the Board of the Central Bank has repeatedly noted that deflationary effects transferred from the external sector have been significant in recent inflation developments.

They are manifested mainly in terms of imported food products as well as non-food products. For example, as of December 2023, the prices of imported food decreased by 7.9 percent, while non-food items experienced an inflation rate of 0.1 percent. This also reflects a gradual decline from the very high price levels of previous years. In the post-pandemic period, we had a situation where international commodity markets encountered a sharp rise in prices due to disruptions in global value chains, which were further exacerbated by increased geopolitical tensions. As a result of the gradual restoration of value chains and the implementation of restraining monetary policy in the main partner countries, prices in the international markets gradually decreased, which was also reflected in the Armenian inflation indicators of 2023.

 It is also important to note that high demand has played a significant role in the development of Armenian inflation in recent years. Starting from 2022, this was mainly due to the high foreign demand generated by a large inflow of international visitors, which somewhat weakened in 2023. Additionally, in 2023, the acceleration of domestic demand in the construction and services sectors became essential. Throughout this period, the actions of the Central Bank were aimed at regulating excess demand and preventing the manifestation of potential unmooring of inflationary expectations. According to the Central Bank's estimates, inflation will gradually increase starting in 2024 and approach the target level of 4 percent in the 3-year horizon.

 The published monetary policy program also presents various scenarios for the development of the macroeconomic situation in the Republic of Armenia, which may result in the formation of either a higher inflationary or lower inflationary environment. However, in any scenario, one thing is clear: the Central Bank, regardless of developments, will be ready and consistent in implementing the inflation target and ensuring price stability in the country over the medium term.

 – Mr. Khachatryan, what were the exchange rates of the dram last year, and what factors influenced them?

– During 2023, although at a milder pace, the trends observed since 2022 continued due to the significant inflow of international visitors and tourists, as well as financial and capital. These influences were also reflected in the trends of the dram exchange rate. In September-October 2023, against the backdrop of Artsakh events, a certain increase in uncertainty and concerns was recorded in the market, which was further reflected by a specific rise in volatility in the currency market. The latter, in fact, settled when the background of uncertainties somewhat eased, leading to the stabilization of the dram exchange rate.

 – In general, what significant changes did 2023 have in terms of financial stability and risks? To what extent was it possible to overcome the existing problems in that regard and end the year with positive results? What to expect this year? What are the steps taken by the Central Bank towards financial stability and what are the predictions for the new year?

 -In addressing the risks threatening financial stability, it is necessary to underscore the factor of geopolitical uncertainties. Another risk, the Central Bank referred to in its publications for many times, pertains to potential overheating trends in the real estate market in recent years. To mitigate these risks, the Central Bank has incrementally raised the capital requirements for the banking system throughout the year, establishing the countercyclical capital buffer rate at 1.5 percent starting from August 2023. To mitigate mortgage credit risks, maximum limits for the loan-to-collateral ratio (set at 90 percent for dram loans) were introduced in 2022.

It is significant to note the amendments made in 2023 to the  Law 'On Currency Regulation and Currency Control,' of the Republic of Armenia which prohibited the provision of foreign currency mortgage loans to residents. Additionally, minimum requirements were implemented for the balances of special development accounts. In 2024, the Central Bank's actions aimed at ensuring the stability of the financial system will be guided by macro-financial conditions, uncertainties and systemic risks.

– What changes and indicators were observed in terms of loans and deposits in 2023 compared to 2022 and what do these indicators signify?

 - As of the end of December 2023, the credit portfolio of the banking system amounted to about 4.7 trillion drams, increasing by about 797 billion drams or 20.4 percent compared to the previous year. Deposits (demand and term) amounted to about 5.1 trillion drams, increasing by about 429.3 billion drams or 9.2 Deposits (demand and term) percent compared to the previous year. These indicators affirm that the banking system is evolving at a dynamic pace, contributing significantly to both the accumulation of savings and the financing of the Armenian economy through lending.

 – What was the economic growth index concluding 2023, and how does it compare with the previous year? Additionally, what is the forecast for this year?

 - In 2023, according to the estimates from the Central Bank, annual economic growth is anticipated to be at a level higher than 8 percent, and in 2024, high growth is also expected within the framework of 6 percent. It is crucial to consider the factors influencing economic growth. In 2022, as mentioned, the primary driver of growth was high external demand, while in the last year, growth fueled by domestic demand in the construction and services sector became significant. The latter is also estimated to gradually weaken, and in 2024, we are expected to approach our long-term potential growth level of 5 percent. It is essential to emphasize that the entire toolkit of the Armenian Government, from the implementation of capital investments to various initiatives and measures aimed at improving the private investment environment, will be directed towards increasing potential growth in the coming years, with the goal of achieving the 7 percent indicator targeted by the Government.

– Mr. Khachatryan, do you anticipate the possibility of sudden sharp fluctuations in the foreign exchange market this year? What are the prospects for sustainability in that regard?

– Firstly, it is important to note that the exchange rate in Armenia is free-floating, determined by a combination of market factors, and the Central Bank does not consider it as a goal. It is noteworthy that various scenarios of economic development, encompassing factors such as tourism, money transfer, other financial flows, as well as potential changes in exports and domestic demand, could lead to scenarios involving both appreciation and depreciation of the exchange rate. It should also be noted that in certain situations, characterized by large-scale financial flows and rapid changes in market expectations, an increase in volatility might occur in the currency market. The Central Bank adheres to the principles of a floating exchange rate and is prepared to intervene to ensure the normal functioning of the market only in the event of risks that could disrupt the regular operation of the financial markets.

 – Considering the processes and developments of the past year, what will be the priorities of the Central Bank's activities this year?

  - Among other priorities, it is worth noting that on January 12, the Central Bank officially presented its new and improved Monetary Policy Development and Decision-Making System (FPAS MARK II). Starting this year, the Central Bank of RA will structure monetary policy decision-making under multiple scenarios and enhance risk management. The latter also signifies significant changes in the areas of transparency and communication of monetary decisions. Regarding the development of the financial system, the priorities of the Central Bank of the Republic of Armenia are outlined in its strategy. Our focus will be on the digital transformation of the financial system, the development of payment systems, the creation and enhancement of modern infrastructure, reducing the sensitivity of the financial system to climate risks, combating money laundering and terrorist financing (AML/CFT), and improving the compliance function, along with the continuous adoption of modern regulatory standards. In addition, we have initiated an institutional transformation program at the Central Bank. As a result, we will be reviewing the bank's management, decision-making, project implementation, budgeting, procurement, personnel management, IT infrastructure, and systems modernization, among other processes. This is important, as the effectiveness of our operations is fundamental to fulfilling the Central Bank's mission.

 Van Novikov

 11:35, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. One of the victims of the 25 September 2023 Stepanakert fuel depot explosion is still hospitalized in Yerevan, Healthcare Minister Anahit Avanesyan has said.

The blast killed 218 people and injured at least 120 others. Some were taken abroad for treatment. Most of them have completed the treatment and have returned to Armenia.

“Approximately twenty patients were sent to France, Belgium, Spain, Bulgaria, the US and other countries for treatment. One patient who was injured in the blast is currently undergoing treatment in Yerevan. The rest are under outpatient supervision,” Avanesyan said.

 12:39, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. Two houses in Yerevan's Erebuni district collapsed Monday morning as a result of an explosion, Internal Affairs Ministry spokesperson Narek Sargsyan told Armenpress.

There were no reports on casualties. However, eyewitnesses said 2 people are trapped in the rubble. The cause of the blast at 34 Nor Aresh Street wasn't immediately clear. Police received the 911 call on an explosion at 11:43.

 14:11, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. Rescue teams have pulled two people alive from the rubble of two houses which collapsed after an explosion in Yerevan’s Erebuni district, Ministry of Internal Affairs spokesperson Narek Sargsyan told reporters. The rescued victims are a man and a woman.

Sargsyan said authorities haven’t yet determined the cause of the explosion.

Multiple search and rescue personnel are working at the scene.

The blast happened Monday morning at 34 Nor Aresh Street in Yerevan.

One of the 2 victims is in serious condition. 

 14:43, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. Law enforcement agencies are treating the February 5 explosion in a Yerevan district as an apparent accident allegedly caused by fire safety violation. 

A statement released by investigators made no indication of possible foul play behind the blast. 

The Investigative Committee said that a criminal case has been instituted under paragraph 2, article 357 of the Criminal Code which deals with ‘the violation of fire safety rules or requirements negligently causing death or other severe consequences.’

The cause of the blast is under investigation.

 were injured in the explosion at 34 Nor Aresh Street in Yerevan.

https://armenpress.am/eng/news/1129573.html?fbclid=IwAR3XwnX4GixsAFxgt4G-z0p-ArxBKnuTpq2GW1_xHfyWeqKYLHTzJpz1sJ8

 18:18, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. The explosion and the subsequent collapse that occurred Monday morning at 34 Nor Aresh Street in Yerevan, resulted in two fatalities and two injuries.  According to the order of the Director of the Rescue Service of the Armenian Ministry of Internal Affairs, all forces have  returned to their deployment locations, the Ministry of Internal Affairs said in a statement.

"Police received the 911 call on an explosion at 11:36.  The rescuers dispatched to the scene took out Hrant Sargsyan (born in 1994) and Roza Nazaryan (born in 1938) from the rubble, and they were immediately hospitalized. 

The search and rescue operations continued, and at 16:05 the bodies of Gayane Yeghoyan and Hayk Soghomonyan were taken out of the rubble.  Multiple search and rescue personnel were working at the scene.

As a result of the explosion, the houses No. 43 and No. 27a at 34 Nor Aresh Street have been completely collapsed, and several other house structures have been damaged," the statement reads.

According to the source, two combat units are on duty at the scene.

Criminal proceedings have been instituted. The cause of the explosion and other circumstances are being investigated.

 13:49, 5 February 2024

YEREVAN, FEBRUARY 5, ARMENPRESS. Georgian intelligence services have thwarted what they described as an attempted smuggling of explosives from Ukraine to Russia through their territory.

According to the State Security Service of Georgia, the cargo of explosives was allegedly being shipped from Ukraine’s Odessa to Russia’s Voronezh for a terror plot. In a statement, the Georgian security service didn’t rule out that the organizers of the shipment also intended to carry out terror attacks in Georgia.

The suspects in the smuggling are reportedly citizens of Georgia, Ukraine and Armenia. According to the report, the smuggling was organized by “citizen of Ukraine, the candidate for deputy of the Kiev district of the local Rada of Odesa district in 2020 from the party "Servant of the People" Andrey Sharashidze, who is originally from the city of Batumi.”

The 14kg cargo sent from Ukraine reportedly reached Georgia on January 19 via Romania, Bulgaria and Turkey.