IMF COMPLETES THIRD REVIEW UNDER STAND-BY ARRANGEMENT FOR ARMENIA

RIA OREANDA
March 31 2010
Russia

Yerevan. OREANDA-NEWS . March 31, 2010. The Executive Board of the
International Monetary Fund (IMF) today completed the third review of
Armenia s economic performance under a program supported by a Stand-By
Arrangement (SBA). The decision enables the immediate release of an
amount equivalent to SDR 48.485 million (about USD 73.6 million),
bringing total disbursements so far an amount equivalent to SDR
350.425 million (about USD 532.2 million).

They Executive Board also approved a request for a waiver of
nonobservance of the end-December 2009 quantitative performance
criterion on the net domestic assets of the Central Bank of Armenia
(CBA).

The 28-month SBA was approved for an amount equivalent to a total
of SDR 368.0 million (about USD 558.9 million) on March 6, 2009 (see
Press Release No. 09/68), with a total amount of access augmented to
an amount equivalent to SDR 533.6 million (about USD 810.4 million)
on June 22, 2009 (see Press Release No. 09/228).

Following the Executive Board’s discussion on Armenia , Mr. Murilo
Portugal , Deputy Managing Director and Acting Chair, stated:

Armenia s performance under its Stand-By Arrangement with the Fund has
been strong, and the economic recession appears to have bottomed out,
aided by supportive monetary and fiscal policies. The challenge remains
to support the fragile recovery, address external vulnerabilities,
and advance a credible fiscal consolidation plan over the medium term.

Fiscal policy aims to continue to support the recovery, while
gradually starting fiscal consolidation in 2010. Social spending will
be protected. The authorities are committed to make good progress on
the reforms in tax policy and administration, as well as on public
expenditure and debt management.

Monetary policy aims to move from an accommodative to a more neutral
stance, in order to head off potential inflation pressures.

The authorities are committed to a flexible exchange rate regime,
and aim to strengthen the monetary transmission mechanism to enhance
the effectiveness of monetary instruments, as well as improve the
central banks communication strategy.

The financial sector remains sound and well capitalized, and
the authorities have strengthened their crisis preparedness and
contingency planning frameworks. Further reforms will be important
to ensure continued resilience to risks.

The authorities are committed to pursue broad-based structural reforms
to enhance productive capacity and promote long-term growth through an
open trade regime, an improved business environment, better governance,
and increased market competition in key sectors of the economy,
Mr. Portugal said.

From: Emil Lazarian | Ararat NewsPress