2 minute read
There is no shortage of liquidity in Armenia.
Central Bank Governor Martin Galstyan made the remarks at a press conference on September 15, addressing the development of the country’s capital market.
“In other words, there is a great deal of money in the country, and individuals and businesses that are prepared to raise financial resources have ambitious plans. They need to submit applications, access those surplus resources and implement their business projects, because the money and the infrastructure are there and they need to make use of them. This does not necessarily have to be through bank loans; they can issue bonds, attract investors and so on,” he said.
While acknowledging Armenia’s negative foreign trade balance, the Central Bank Governor stressed that it was nevertheless necessary to look several levels deeper to get the full picture.
“More money is leaving our country than coming in. At the same time, however, the balance of payments has a second part called the capital and financial account: this includes direct investment, indirect investment and portfolio investment. Huge amounts of money are coming into Armenia through these channels. They come through the banking system and subsequently become loans; they come in the form of debt raised by private companies; and foreign institutional investors come and buy Armenian government bonds.
“Not so long ago, we did not have institutional players buying Armenian government bonds denominated in drams. Today, 15% of our total debt is held by foreign institutional players. This is due to growing interest in Armenia. Armenia’s risk profile has changed,” he said.