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    Categories: 2021

RFE/RL Armenian Report – 02/02/2021

                                        Tuesday, February 02, 2021

Armenian Official Confirms New Eurobond Issue
February 02, 2021
        • Sargis Harutyunyan

Armenia - Martin Galstian, the governor of the Armenian Central Bank, speaks 
with journalists, February 2, 2021.

Central Bank Governor Martin Galstian confirmed on Tuesday reports that Armenia 
has issued its fourth Eurobond worth $750 million to manage its increased public 
debt and budget deficit.

Galstian said that the dollar-denominated bonds, repayable in 10 years at an 
annual yield of almost 3.9 percent, attracted strong interest from foreign 
investors.

“Never before has there been so much demand for bonds issued by Armenia,” he 
told reporters. “This has to do with a number of factors. International 
financial institutions and investors have accumulated large amounts of cash, and 
they are looking to see where to invest them.”

The Armenian government has not yet commented on the latest Eurobond issue. It 
is not clear whether it plans to use the proceeds to fully or partly buy back 
$500 million in similar bonds sold at a 4.2 percent yield in September 2019.

The government needs cash to finance its 2021 budget deficit projected at 341 
billion drams ($658 million) or 5.3 percent of GDP. Under its budget bill 
approved by the parliament in December, 60 percent of the deficit is to be 
covered from external resources.

The government already resorted to additional external borrowing last year to 
make up for a significant shortfall in its tax revenues resulting from an 
economic recession caused by the coronavirus pandemic. As a result, Armenia’s 
public debt rose by $647 million, to almost $8 billion, in the course of 2020. 
The debt is projected to pass the $9 billion mark this year.

According to the latest Central Bank estimates cited by Galstian, the Armenian 
economy contracted by 7.8 percent last year but should grow by about 2 percent 
in 2021. The government expects slightly faster growth.



Kocharian To Again Visit Moscow
February 02, 2021
        • Robert Zargarian

Armenia -- Former President Robert Kocharian attends his trial in Yerevan, 
February 2, 2021.

The judge presiding over the trial of Robert Kocharian has allowed the former 
Armenian president to visit Moscow for the second time in less than two months, 
it emerged on Tuesday.

A trial prosecutor, Gevorg Baghdasarian, revealed the permission and demanded an 
explanation from the judge, Anna Danibekian, during the latest court hearing on 
coup charges leveled against Kocharian and three other former officials.

“We don’t know the grounds on which Robert Kocharian is allowed to leave 
Armenia,” complained Baghdasarian. He said Danibekian should have consulted with 
the prosecution before making the decision communicated to the Armenian police.

“If you think that the court’s decision must be appealed you are not deprived of 
that possibility,” countered the judge.

Kocharian was allowed to be absent from the country from February 3-8. His 
spokesman Victor Soghomonian told the “Hraparak” newspaper that the ex-president 
will fly to Moscow to take part in a meeting of the board of directors of a 
major Russian corporation, AFK Sistema.

Kocharian has been a board member since 2009. He reportedly attended a board 
meeting during his previous trip to the Russian capital in mid-December.

The 66-year-old, who governed Armenia from 1998-2008, had not been able to 
attend any Sistema meetings since being first arrested in July 2018. He was most 
recently released from jail on bail in May 2020.

Sistema’s main shareholder, Vladimir Yevtushenkov, was reportedly one of four 
wealthy Russian businessmen who paid the bulk of the $4.1 million bail set by 
Armenia’s Court of Appeals.

Russia has criticized the criminal proceedings launched against Kocharian. 
Russian President Vladimir Putin has repeatedly made a point of congratulating 
him on his birthday anniversaries and praising his legacy.

Some Kocharian loyalists claimed that Putin spoke with his former Armenian 
counterpart by phone during the latter’s December trip to Moscow. Kocharian’s 
office did not confirm that.

The ex-president, his former chief of staff Armen Gevorgian and Armenia’s two 
former top generals, Seyran Ohanian and Yuri Khachaturov, stand accused of 
overthrowing the “constitutional order” after a disputed presidential election 
held during the final weeks of Kocharian’s decade-long rule. The charges stem 
from a deadly post-election unrest in Yerevan. All four defendants reject them 
as politically motivated.

Speaking during Tuesday’s court hearing, Kocharian insisted that he is tried for 
his handling of a “political process.”

Kocharian has been at loggerheads with Prime Minister Nikol Pashinian’s 
government ever since it took office following the “Velvet Revolution” of 
April-May 2018. He has joined opposition groups in blaming Pashinian for 
Armenia’s defeat in the recent war in Nagorno-Karabakh and demanding his 
resignation.

Kocharian said last week that that he and his political allies will participate 
in snap parliamentary elections even if they are held by Armenia’s current 
government. “We will participate and win,” he declared.



Azeri Soldiers Detained, Freed In Armenia
February 02, 2021
        • Nane Sahakian

Armenian -- Armenian army officers at a new border post in Syunik province 
bordering Azerbaijan, December 11, 2020.

The Russian military announced late on Monday that it has secured the release of 
two Azerbaijani army soldiers detained after crossing into Armenia at the 
weekend.

The Defense Ministry in Moscow said they were detained by officers of Armenia’s 
National Security Service (NSS) near the village of Tegh in Armenia’s 
southeastern Syunik province. It gave no details of the incident.

A ministry statement said the Azerbaijani servicemen were freed at the request 
of Russian peacekeeping troops stationed in and around Nagorno-Karabakh.

The NSS and the Armenian Defense Ministry did not comment on the incident on 
Tuesday. Tegh’s mayor, Nerses Shadunts, confirmed the detentions but said he is 
not allowed to disclose their circumstances.

“The situation here is not tense right now,” Shadunts told RFE/RL’s Armenian 
Service. “There is no panic among local people. Everything is normal.”

“As for our border guards and army, you can conclude that everyone was on duty 
and vigilant and properly did their job,” he said.

Tegh is located close to the so-called Lachin corridor that connects Armenia to 
Karabakh and is controlled by the Russian peacekeepers. The rural community also 
borders the rest of the Lachin district which was handed back to Azerbaijan 
under the terms of the Russian-brokered ceasefire agreement that stopped the war 
in Karabakh on November 10.

During the six-week war Russia deployed soldiers and border guards to Syunik to 
help the Armenian military defend the region located southwest of Karabakh 
against possible Azerbaijani attacks. One of the Russian border guard posts was 
set up near Tegh.

Russian troops also patrol sections of the main regional highway straddling the 
Soviet-era Armenian-Azerbaijani border.



Armenian Central Bank Again Raises Key Interest Rate
February 02, 2021

Armenia -- A statue symbolizing the national currency, the dram, outside the 
Central Bank building in Yerevan.

The Central Bank of Armenia (CBA) raised its main interest rate on Tuesday for 
the second time in less than two months.

The CBA’s governing board set the refinancing rate at 5.5 percent, up by 0.25 
percentage points.

The board already raised it by 1 percentage point on December 15 following a 
nearly 6 percent depreciation of the national currency, the dram. The dram’s 
exchange rate has remained largely stable since then.

The CBA said on January 13 that it will again resort to currency interventions 
to ensure “the normal functioning of Armenia’s financial markets.”

In a statement issued later in the day, the bank attributed the latest rate 
increase to stronger inflationary pressures on the Armenian economy. It said 
that the increased cost of imported foodstuffs “considerably” pushed up consumer 
price inflation in the country in December.

CBA data shows that Armenia’s foreign exchange reserves fell from $2.6 billion 
in August 2020 to $2.2 billion in November before growing by over $360 million 
in December.

The Central Bank cut its benchmark rate for four times between March and 
September last year as the Armenian economy plunged into recession due to the 
coronavirus pandemic.

Armenia’s economic outlook worsened further following the ensuing outbreak of 
the war in Nagorno-Karabakh stopped by a Russian-brokered ceasefire on November 
10. The country’s GDP shrunk by an estimated 8.5 percent in 2020.

In its 2021 state budget approved by the parliament in December, the Armenian 
government forecast a GDP growth rate of 3.2 percent for this year. The 
International Monetary Fund expects the Armenian economy to expand by only 1 
percent in 2021.


Reprinted on ANN/Armenian News with permission from RFE/RL
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