International Reserves
The Central Bank of the Republic of Armenia holds, manages, and exercises authority over the use and disposition of the international reserves of the Republic of Armenia in pursuit of its statutory objectives. The management of Armenia’s international reserves is governed by the Law of the Republic of Armenia on the Central Bank of the Republic of Armenia (Article 52), the Investment Policy Statement and the framework for the Management of the international reserves, approved by the Board of the Central Bank.
- What constitutes the international reserves of the Republic of Armenia?
The international reserves of the Republic of Armenia are recorded on the balance sheet of the Central Bank, which may be comprised of eligible assets denominated in eligible currencies and precious metals as defined by the Investment Policy Statement.
- How are the international reserves of the Republic of Armenia accumulated?
The international reserves of the Republic of Armenia are accumulated as a result of foreign currency–denominated liabilities undertaken by the Government of the Republic of Armenia and the Central Bank, payments received in foreign currency, foreign exchange purchase operations conducted by the Central Bank, as well as income generated from the management of the international reserves.
- What are the accumulation objectives of international reserves?
The accumulation objectives of international reserves of the Republic of Armenia are to:
- maintain reserve funds necessary to support the implementation of monetary policy and financial stability objectives;
- ensure the availability of adequate foreign currency liquidity to mitigate the potential impact of shocks in financial markets and to maintain their normal functioning;
- maintain sufficient funds to safeguard the smooth and timely fulfilment of current and future foreign exchange obligations undertaken by the Government and the Central Bank, while contributing to the enhancement of the investment credibility of the Republic of Armenia.
- What are the primary criteria guiding management of international reserves?
The primary allocation criteria derived from the objectives of international reserves are the safety and liquidity of reserve assets. Management is conducted in a manner to ensure that:
- the objectives of international reserves accumulation are fulfilled without impediment and at minimum cost;
- the risk profile of international reserves investments is maintained within the risk tolerance limits established by the Investment Policy Statement;
- subject to the above constraints, the expected return from the management of international reserves is maximized over the investment horizon.
To enhance transparency and accountability in the management of international reserves, the Central Bank annually publishes indicators on management of international reserves in accordance with the relevant Board decision.
Official statistics on the international reserves of the Republic of Armenia are available at the link below.