From Armenia in brief: IMF approves increase of financial support to Armenia to $822.7 million

by M. T.

Published: Saturday June 27, 2009

Nienke Oomes, the IMF resident representative in Armenia. Haik Badalyan / Photolure

Yerevan - The Executive Board of the InternationalMonetary Fund (IMF) completed the firstreview of Armenia's economic performance under a Stand-By Arrangement (SBA) and approved anincrease in the IMF's financial support toan amount equivalent to SDR 533.6 million (about$822.7 million or 580 percent of Armenia's quota). An official from the IMF Armenia office saidthat these decisions enable the immediate release of SDR 102.7 million (about$158.3 million U.S.), bringing the total disbursed to SDR 264.2 million (about$400 million), Armenpress reported. The Board also granted a waiver ofperformance criteria on net banking system credit to the government and theprogram's fiscal balance.

The revised arrangementwill support the government's economic program amid a sharper-than-expectedimpact from the global financial crisis. The 28-month SBA was approved on March6.

The key objectives ofthe program are to help Armenia adjust to the external shock, maintainconfidence in the currency and the financial system, and protect the poor. Thesharp contraction in economic activity, the fall in remittances, an increase inunemployment, and difficult conditions in credit markets require an easing ofmacroeconomic policies and the implementation of several measures to stimulatedomestic demand and create new jobs.

On June 24, Mediamaxreported that Armenia was already going to receive $158 million from the IMF bythe end of the week. This was announced by the IMF resident representative in ArmeniaNienkeOomes ata press conference in Yerevan.

When asked if Armeniawould have the ability to maintain its external debt, Ms. Oomes said thataccording to an IMF assessment in 2011, the correlation of the state debt toGDP would be 46 percent, which is manageable according to her.