Foreign Exchange Policy
The foreign exchange policy of the Central Bank is aimed at enhancing the reliability and international credibility of the Armenian Dram and creating a legal and economic framework for current account operations, flows of the Capital Account and foreign investments, through an effective management of currency reserves of the Republic of Armenia. To this end, an appropriate exchange rate regime has been adopted, principles of the foreign currency operations framework have been developed and a scope of legislative background has been set.
Exchange Rate Regime
The Central Bank is conducting a freely floating exchange rate regime which is consistent with the principles of liberalized capital account operations and implementation of an independent monetary policy. The Central Bank's intervention in the foreign exchange market is carried out based on the goals of the monetary policy. The Central Bank publishes the Armenian Dram's market based average exchange rates vis-à-vis foreign currency.
Description of the Foreign Exchange Regulation Framework
The foreign exchange regulation framework determines procedure and terms of currency transactions; cases of ownership, holding and use of currency values, procedure and terms, and regulates other relations linked to currency regulation and currency control in the Republic of Armenia.In the Republic of Armenia, sales of goods/property and rendering services, wages and other payments connected with labor relations, property appraisal and use should be quoted in the Armenian currency.
In the Republic of Armenia, the payments (including payments of interest on financial operations) for sales of goods/property, rendering services and labor remuneration, use of property, the right or privilege to be given in exchange for compensations, insurance payments and insurance indemnities between residents are made in the Armenian currency.
In the Republic of Armenia, investments of money in statutory fund and equity of legal entities should be made in the Armenian currency.
In the Republic of Armenia, money prize and winnings should be advertised and delivered only in the Armenian currency.
Both, the residents and non-residents can make foreign exchange purchase and sale operations in the domestic currency market, without any restrictions, with preferred and agreed rates, through the parties licensed by the Central Bank, i.e. banks, credit organizations, currency dealers, exchange offices and foreign banks' branches offices operating in the Republic of Armenia, as well as through the Central Bank.
The operations of the payment system in Armenia and implementation of foreign currency operations connected with the service of customers by the banks are liberalized. The commercial banks, their branch offices and branch offices of non-resident banks may service all types of internationally accepted accounts. Similarly, residents may open internationally accepted accounts with foreign banks.
Importing to and exporting from the Republic of Armenia of cash currency, other currency values (except from coins made from precious metals), treasury notes and traveler’s checks up to the equivalent of $10 thousand are allowed without restriction. Imports of currency values exceeding that amount from non-members of Eurasian economic union and exports to non-members of Eurasian economic union must be declared to the customs."
The Capital Account operations, i.e. direct and portfolio investments, transfers of payment for property ownership and other rights, operations by long-term (over 180 days) financial instruments, are also liberalized. The Central Bank may, however, determine other terms and conditions for the flows of the Capital and Financial Account transactions on a purpose to maintain financial system stability, combat money laundering and terrorism financing, improvement of statistics and economic risks management.
The IMF Membership
The Republic of Armenia joined the IMF in April 28, 1992 by adopting the obligations under sections 1, 3, and 4 of Article VIII of the Agreement, whereby Armenia assures the international community that it will conduct a reliable economic policy supporting the development of a multilateral payments system, free of restrictions.
Currency Legislation and Regulatory Acts