Frequently asked Questions

What is the Central Bank of Armenia?
- The Central Bank of the Republic of Armenia is the national bank of the Republic of Armenia. The Central Bank is a legal entity vested with state functions, the sole founder of which is the Republic of Armenia.
What does the Central bank of Armenia do?
- The Central bank of Armenia ensures stability, liquidity, solvency and conditions necessary for the normal activity of the financial system of the Republic of Armenia.
When was the Central bank of Armenia established?
- On September 21, 1991, the all-national referendum proclaimed Armenia as an independent Republic. On April 27, 1993, the Republic of Armenia adopted law on “The Central Bank of the Republic of Armenia”, and the National Bank was renamed into the Central Bank of the Republic of Armenia under governorship by Isahak Isahakyan who had been governing the State Bank since 1986.
Who appoints the Governor of the Central Bank of Armenia?
- The Governor of the Central Bank is the highest official of the Bank and is appointed by the Republic of Armenia National Assembly for a 6-year term.
What does it mean that the Central bank of Armenia is independent?
- The central bank independence is an important institutional prerequisite for maintaining price stability. Studies suggest that operational independence of central banks contributes to the credibility of implemented monetary policy while enhancing the market reaction to the central bank impulses. Empirical analyses have revealed a direct relation between the central bank independence and low inflation (Cukierman A., Central Bank Strategy, Credibility and Independence; Theory and Evidence, MIT press, 1998).
  
  There are three degrees of the central bank’s independence in terms of monetary policy implementation:
  - goal independence
  - target setting independence
  - operational independence
  Goal independence (setting the objective) is the highest degree of independence, which is granted to, for example, the U.S. Federal Reserve System. Based on economic policy priorities, however, the Fed may alter the objective. In case of Armenia, the Central Bank is not entitled with such a degree of independence: the Central Bank’s main objective is defined by the Republic of Armenia Constitution and the Law on the Central Bank. In Armenia, the independence for setting the target indicator is prescribed by the Law on the Budget. The operational independence suggests that the central bank can use its tools independently to achieve the ultimate goal. The Central Bank of Armenia has operational independence, and this is granted to not all countries’ central banks. An example is the Bank of England which until 1998 had no independence for using tools, and it was the executive power’s competence to interfere.
How is central bank independence measured?
- There are several indexes that measure the central bank's independence. These include the Alesin Index (1988), the GMT index (Grilli, Masciandaro, Tabellini) (Grilli, V., Masciandaro, D., Tabellini, G., 1991; Political and Monetary Institutions and Public Financial Policies in the Industrial Countries. 1991), the Cukierman index (1992). The analysis for Armenia, which was carried out by Cukierman (the Cukierman Index) in 2000, sums up estimations for the Central Bank’s independence (Cukierman A., Miller J., Neyapti B., Central Bank Reform, Liberalization and Inflation in Transition Economies. An International Perspective, Journal of Monetary Economics 49, 2002).
  
  The analysis was performed using two groups of criteria. By one group of these criteria, Armenia ranks 1st place among 23 countries of the CIS and Eastern Europe, and by the other group criteria, the country is given the second place.
  
  Based on the 2013 estimates, the Central Bank of Armenia has maintained a high degree of independence.
What is inflation?
- The National Statistics Service of the Republic of Armenia tracks time series that represent a movement of prices, i.e. price indices, for selected sectors of the Armenian economy. For the consumer market it is consumer price index, for the general economy it is GDP deflator which represents median growth of all goods and services produced in the economy; there is export price index for foreign trade, and import price index for domestic trade, and so on. Inflation is the growth rate of any index in any particular sector of the economy and it often has a specific calculation methodology. In both all countries of the world and Armenia the term inflation is used primarily when the growth rate of the consumer price index is dealt with. Though it does not reflect the economy in full, it however is most perceptible to the general public.
What are collector coins and how to purchase them?
- Collector coins are made of precious metals and are issued to present to the society the national, international, historical and cultural, spiritual and other values of the country, to immortalize these values in the metal and to meet the demands of the numismatic market. The salon “Numismatist” is designed to sell collector coins issued by the Central Bank of Armenia, as well as other numismatic values. All the collector coins issued by the Central Bank of Armenia have certificates of authenticity, signed by the Chairman of the Central Bank of Armenia, and are offered in their cases. The visitors are provided with artistically designed information leaflets that tell the event any particular coin is dedicated to.
What are the solvency features of the Dram?
- Banknotes and coins of RA shall be considered solvent if they correspond to the description and solvency features defined by the Central bank. Banknotes shall be considered solvent and exchanged by natural and legal persons, which;
  - in an insignificant way poked, torn, worn out, or carry insignificant stains and written notes;
  - on which there is an insignificant amount of paint, but the core images on the banknote and the protective features are not covered,
  - or they are burnt in an insignificant way, but the integrity of the banknote has been preserved.
How to identify if my banknote is considered solvent?
- Banknotes shall be considered solvent, but can be exchanged only in the banks, which;
  - have not maintained their integrity, but at least 60% of the surface area of the banknote has been clearly preserved, and the preserved part allows to establish the validity of the banknote,
  - are made up of attached no more than 3 torn pieces of indisputably the same banknote;
  have been covered with paint or have lost their color, but the images and protective features are visible, and allow to establish the validity of the banknote. (READ MORE)
Why is my banknote considered insolvent?
- Banknotes shall be considered insolvent and cannot be changed, if the integrity has not consist of 60% of the surface area of the banknote, which have notes on extinguished solvency, have been deliberately altered (as to the nominal value, design, and image sizes), and their protective features (holographic image and foil) have had deliberately removed.