On Dec 25 banks were more active on interbank forex market than at NASDAQ OMX Armenia

On Dec
25, Armenia's Central Bank sold banks $2mln, i.e. the total amount offered. The
press service of the CB reports that the average AMD/USD exchange rate on the
interbank forex market dropped to 459.29 AMD/1 USD, with the cut-off price
remaining changed at 457.76 AMD/1USD. At NASDAQ OMX Armenia the banks'
transactions amounted to 1.1 mln USD at the average exchange rate of 460.34
AMD/1USD versus yesterday's 458 AMD/1USD.

Since the launch of its daily interventions - from Dec
8 through Dec 25 - the CB has sold on the interbank forex market a total of
$50.7mln: $6mln a day Dec 8-12, $4mln a day Dec 15-17, $1.7mln Dec 20, $1mln
Dec 22, and $2mln Dec 23-25. During this period the average rate first rose
from 456.63 AMD to 570.58 AMD per 1 USD, then dropped to 446.76 AMD/1 USD on
Dec 20. On Dec 22 it started rising again and made up 459.29 AMD/1 USD on Dec
25. The cut-off price rose from 455 to 567.65 AMD/$1, then dropped to 445
AMD/$1 on Dec 20, but on Dec 24 it rose to 457.76 AMD/$1 and remained unchanged
on Dec 25.

From Oct through Dec 17 AMD dropped against USD by
45%, Dec 18-20 it grew by 25%. On Dec 22 it started dropping again. On Dec 25,
at 4:30 pm, the rate was 463 AMD against 1 USD, 568.5 AMD against 1 EUR, 9.1
AMD against RUR. On Dec 20 the rates were 455 AMD, 555 AMD and 7.8 AMD,
respectively, versus 570 AMD, 712 AMD and 8.6 AMD, respectively, on Dec 17.

According to the CBA's statement dated 8 December
2014, on 8 December, the Central Bank of Armenia launched daily interventions
to restore the balance in the exchange market and the soften currency
fluctuations.  The interventions will
last till the end of 2014. The CBA will continue announcing the ceiling of
daily sale amounts till the end of the year to normalize the situation in the
exchange market of Armenia. According to the source, the CB will be publishing
foreign exchange operations to ensure transparency in the financial market of
Armenia.  The daily intervention amounts
will be reduced gradually until the national currency exchange rate is
balanced. In particular, during the first week (8- 12 December) the daily
interventions were $6 mln. Afterwards, the daily interventions were gradually
reduced to 4 mln USD and then 2 mln USD and they will be brought to zero by the
end of the year. Along with this, on Dec 17, the CB toughened the forex reserve
ratio from 12% to 24%, and the banks place the "reserve" funds at the
CB entirely in terms of Armenian dram. On Dec 3, the CB raised the Lombard repo
rates from 10.25 to 21%. On
Dec 23, the CB raised the refinancing rate from 6.75 to 8.5%.

On Dec 25
(at 4:30 pm) AMD/USD buying/selling rates on the interbank forex market made up
459/467 AMD/1 USD, AMD/EUR rates - 557/580 AMD/1 EUR, AMD/RUR rates - 8.7/9.45
AMD/1 RUR versus 456/465, 552/572, and 8.55/9, respectively, in the morning. At
NASDAQ OMX Armenia, from June through December 25, foreign exchange operations
amounted to $406.2 million drams with the exchange rate growing from 407.14 to
560 AMD/1 USD, then dropping to 442.44 AMD/1USD and rising to 460.34 AMD/1USD
on Dec 25. The transactions in November alone totaled nearly $117 million
drams.  On 1-5 Dec, interbank market of
foreign exchange operations registered a record-breaking indicator - $59.3
million.