CBA PLACES GOVERNMENT BONDS IN ARMENIA

YEREVAN, June 13. /ARKA/. Short-term government bonds of the
Central Bank of Armenia (CBA) have for the first time been placed in
Armenia. The CBA press service reports that the first issue of CBA’s
securities totaled 2bln AMD. The CBA issued 91-day government bonds of
the AMCB13129053 series. Bids made up 1,923,000,000 AMD. Government
bonds worth a total of 1,057,000,000 AMD were placed, 54.97% of the
bids and 52.85% of the announced issue volume. Fourteen dealers took
part in the tenders. The average weighted yield of government bonds
made up 4.6460%.

>>From now on, besides the traditional instruments of monetary policy,
the CBA intends to actively apply such instruments for sterilizing
access liquidity as regular issues of its own securities, (CBA’s
government short-term bonds). The CBA experts forecast a considerable
increase in dram liquidity in Armenia’s banking system. The reason
for that is that a new standard of compulsory reservation at the
CBA was enforced in Armenia on June 10, 2005. According to the new
standard, reservation of the funds attracted by Armenia’s commercial
banks will be carried out in terms of the corresponding currency – USD
reservation of USD funds, AMD reservation of AMD funds, EUR reservation
for EUR funds. As regards other currencies, USD reservation will be
carried out.

The minimum standard of compulsory reservation at the CBA is 8% of the
volume of attracted funds against the previous 6%. According to the
CBA’s latest information, on June 6, 2005, the compulsory reservation
volume at the CBA made up 30.2bln AMD, monetary base 141.9bln AMD
($1 – AMD 456.70) P.T. –0-