Russian side transfers 500 million dollars to CBA account on June 12

YEREVAN, JUNE 12, NOYAN TAPAN. The Agreement between the Government of
the Republic of Armenia and the Government of the Russian Federation on
the Provision of a State Credit, under which a 500 million-dollar
credit is given to Armenia, took effect on June 11 – the notification
day on the fulfilment of domestic procedures.

According to a press release of the Information and PR Unit of RA
Minmistry of Finance, immediately after the agreement took effect – on
June 12, the Russian side has transferred 500 million dollars to the
account of the Central Bank of Armenia (CBA). This sum will be
transferred from the CBA’s account to the treasury single account of
the RA Ministry of Finance on the same day.

The credit is provided at LIBOR + 3% annual interest rate for 15 years,
with a 4-year grace period. The agreement was signed by the Russian and
Armenian ministers of finance in Moscow on May 20.

The state credit will be used for the following purposes:

1) financing the expenditures on the rehabilitation program in the
earthquake zone from the state budget of Armenia,

2) provision of credits to small and medium entrepreneurs through the
Small and Medium Entrepreneurship Development National Center of
Armenia (SME DNC) Foundation,

3) formation of the Stabilization Fund. Resources of the Stabilization
Fund are envisaged for:

a) provision of credits to economy,

b) assistance to the National Mortgage Company,

c) financing the deficit of the state budget of Armenia,

d) in case of necessity, for use in other directions established by law
or the government of Armenia.

The circulation of funds of the state credit in the order established
by the budget legislation will be reflected in the state budget and the
reports on its implementation. Separate calculation of expenditures
from the state credit will be ensured as well.