President Serzh Sargsyan Held Consultation with Leadership of Central Bank

Today President Serzh Sargsyan visited the Central Bank. The President of Armenia toured the chief bank’s several structural units, particularly Internal Audit Group, Cash Operation Department and Financial Department. The Central Bank’s Chief Auditor presented to the president the structure’s internal audit implementation approaches, including technology solutions used for automation.

At Cash Operation Department Serzh Sargsyan familiarized with the cash automatic recounting process being accomplished by modern and fast banknote processing equipment. The human factor during the whole banknote processing cycle has been minimized due to the equipment used in the Central Bank and as a result of automation functional risks have been substantially reduced. The current equipment automatically counts and separates fake and invalid banknotes while packing valid ones. Moreover, the device eliminates shabby banknotes by grinding them.
At Financial Department the president was presented the current situation in international financial markets, the main directions of the RA international reserve management, as well as the dynamics of the RA European bonds and the behavior of investors.

Following the tour, President Serzh Sargsyan held a consultation with the leadership of the Central Bank. The Chairman of the Central Bank Arthur Javadyan, the Deputy Chairman Nerses Yeritsyan and Heads of a group of structural units presented the main directions of the Central Bank’s activities, the recent years’ achievements, the reforms initiated by the Bank, as well as the problems of the banking system and the ways of dealing with those problems.

The Chairman of the Central Bank Arthur Javadyan summed up the achievements and the works implemented in the banking sphere throughout recent years and outlined the Central Bank’s main strategic development directions, the existing challenges and the means to overcome them.

The Deputy Chairman of the Central Bank Nerses Yeritsyan introduced the results of Dilijan Training and Research Centre’s one-year activities, the research works being implemented at the Central Bank, as well as the steps being taken to develop scientific potential.

Head of Monetary Policy Department Vahagn Grigoryan touched upon the inflation management problems and the recent years’ monetary policy activities. He also introduced the Central Bank’s institutional capacities and underscored the challenges of implementing an effective monetary policy.

Head of Financial System Stability and Development Department Andranik Grigoryan presented the developments of Armenia’s financial system over the last 5 years, the current situation and the development prospects. Touching upon the developments of the financial system, he noted that during that period, financial loans, deposits, actives and other main balance indexes have been tripled indicating the raise of the availability of financial services. According to the results of the strict stress tests designed to estimate the financial solvency the RA financial system is able to confront different shocks. Among future objectives Andranik Grigoryan marked out the introduction of the Basel III Standards which will stimulate the reinforcement of financial stability.

Head of Statistics Department Martin Galstyan introduced the Central Bank’s statistical works. It was especially underlined that in 2003 Armenia’s statistical system was integrated into the IMF’s most advanced and rigorous Special Data Dissemination Standards system and in 2008 the Central Bank’s Statistics was received the highest rating by the IMF’s statistical mission. In the future, the Central Bank’s statistical works will develop in two main directions: the advancement of inquiry comprehensiveness and the launch of micro data information bank.

The Central Bank’s Acting Head of Secretariat Davit Nahapetyan touched upon the Central Bank’s institutional development directions, particularly the increase of the Central Bank’s management quality and effectiveness, as well as the personnel management and the issues regarding international cooperation.

Serzh Sargsyan gave questions to the speakers on separate issues, presented his observations and gave instructions to the staff in charge, as well as talked about the Central Bank’s forthcoming works. The president touched upon the works targeted at supporting the peasant households suffered from the frostbite adding that the issue was under the Government’s consideration. “There is enough damage, but I think that thanks to the joint works of the Government and the Central Bank we can substantially mitigate the damages. We have accumulated such experience for years and during the last year’s hail damage in Armavir we worked more actively. I think that now we should also demonstrate the same activity and work even harder,” said Serzh Sargsyan. According to the president, the loan maturity and the payment graphic envisaged for the suffered households should be paid a special attention to make them a bit favorable and mild. “Last year we were again able to express certain positive attitude when the international loans were converted to our currency as dram loans. It is also very vital for people’s future in order for them to feel safe. We have some works to do in this direction as well and we should certainly continue subsidizing loan percentages for which some measures have been taken,” underlined the president. He said that everything had to be done to relieve the people’s worries. The president noted that people feel as if the banks, including the Central Bank aim to lend expensive credits or to make much money and that in this respect, the latter fosters the activities of the private banks and as if the loan percentages are so high that they lead to super profits. According to the president, the incidents of the suffered households were indeed a tragedy for the people and detrimental for the economy, but on the other hand, it afforded a convenient opportunity to show that the banks and the financial system in general are greatly interested in the development of the economy. “Thus, I ask you to be active and to get in touch with those people. If you have not already done that, you should begin to do that tomorrow and should give a helping hand. I would like to draw your attention on one circumstance as well: of course every support is good if it is named like that, but it will be better for that support to be comprehensive. I mean that if we help one part and neglect the other – of course I am talking about the same category of people – we simply make a flagrant error here. I mean the researches as well. It will be perfect if we can do the researches comprehensively,” underscored President Serzh Sargsyan.

At the Central Bank, the president answered the various questions of the participants of the consultation related to the country’s internal and foreign policy, the defensive capacity, the formation of a new government after the resignation of the Government led by Tigran Sargsyan, the Armenians displaced from Kesab and the assistance being rendered to our compatriots in Syria caught in a difficult situation, as well as to regional issues.

When answering the question on the new government the president stated, “Of course, I will speak about the new government yet, but I think that the new government should be able to sustain economic growth, to ensure the continuity of reforms and it should be able to restore our citizens’ confidence in reforms and its activities. These are the minimal objectives the new government should be able to reach. I think that essential changes should be made in the Government as it is necessary to view the existing problems and spheres in a new light.

I would like to add once again that the resignation of the prime minister was indeed a resignation and not a compulsion. When we were discussing it yesterday at the party meeting, I said that the prime minster had intended to send in his resignation on 3th of March. We did not do that in order to say that we did not do this under the pressure of some political forces. We simply want to tell our colleagues and our public that this was the situation.

Six years is a long time for a prime minister. It is the most difficult, the most unbearable and may be I am wrong but it is the most grateful work – I mean the concrete period. I have worked in that position for a very short time, but it is enough to feel its difficulty. Unfortunately, this is our situation, but I think that after some twenty years it will be much easier to carry out the majority of works,” said the president.

At the end of the consultation, a group of Central Bank’s employees were awarded encouragements for their conscientious and effective work. Head of Financial Audit Division of Internal Audit Group Marianna Amirbekyan, Head of Financial System Analysis Division of Financial System Stability and Development Department Artak Asatryan, Head of Real Sector Analysis and Forecasts Division of Monetary Policy Department Narek Ghazaryan, the Methodology Specialist of Securities Market Regulation Division of Financial System Regulation Department Lilit Manvelyan, the Methodology Specialist and Legal Adviser of Financial Monitoring Center Hasmik Musikyan were awarded Letters of Commendation.