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Central Bank of Armenia

It’s likely that every investor knows that central banks play a large regulatory role in their respective countries. However, they often forget how large the impact is, specifically in the area of trading and investing. The most apparent example of that is the forex market, where central banks usually control currency inflation and deflation. However, there are much more nuanced impacts as well, as central banks often act as rule-makers. As such, they directly impact the experience of traders, but also the companies that operate in their own country.

As such, if you’re interested in investing in a company in a specific country, its central bank is directly impacting you. Furthermore, your home country’s central bank is also always slightly impacting your investing experience. That means learning about them can give you a significant edge in improving your investing experience. That brings us to today’s topic, the Central Bank of Armenia.

The Central Bank of Armenia (CBA) is an autonomous institution with a broad area of responsibility. It’s the primary banknote issuer and plays a vital role in controlling the country’s currency reserves. It operates from Yerevan, the country’s largest and capital city. It’s also a part of the Alliance for Financial Inclusion, with the role of promoting financial inclusion. The current head of the CBA is Martin Galstyan.


The history of the Central Bank of Armenia and Armenian currency dates way back to the 6th century BC. However, if we started there, it wouldn’t leave much space for other, more relevant information. So instead, we’ll begin with a slightly more recent date, when the CBA was more in line with its current form. 

One of the most important developments in the history of the CBA is the introduction of a national currency in 1993. As part of Resolution No. 15 of 19.11.2003 of the Supreme Council of the Republic of Armenia, the Dram started circulating. From there, developments were rapid, with the CBA developing its first monetary policy in 1994. The first policy had the suppression of inflation as one of its primary goals.

The next major step was the adoption of banking legislation, which came in 1996. Some of the laws added then were the Law on Banks and Banking, Law on Bank Secrecy, and Law on Bank Bankruptcy. It was a major step towards improving economic health and maintaining price stability across Armenia. 

Following that, the CBA worked on crafting a national system of payments and settlements. The task took five years, from 1996 to 2001 and introduced numerous solutions to help electronic payments. It introduced systems such as BOOKENTRY, SWIFT, and BANKMAIL, which help interbank and international payments. They also had a positive effect on securities launching and payment. The effort also resulted in the creation of ArCa, a unified payment, and settlement system.

Skipping slightly ahead, we’d also need to mention the bank’s central role as a mega-regulator. That role is perhaps the most important for potential investors and traders that use Armenia’s currency or other securities. The framework was set up in 2006 and complied with both Armenian law and international policy.

Mission and Tasks

While we skipped a part of the history, it’s well-documented and there’s not enough room to go over everything. Instead of dwelling on the historical developments of the Central Bank of Armenia, we’ll look at its current state. Here, we’ll go over the primary role the CBA currently plays and how it affects the economy and, as an extension, investors.

Its primary task is to ensure a high degree of financial stability, achieving that via regulation and controlling inflation/deflation. Furthermore, as we already mentioned, it’s the primary currency issuer, controlling the cycle and reserves. Next, it combats terrorism financing and other misuses of funds, such as money laundering. It also plays a significant role in the forex market, managing Armenia’s international reserves. Lastly, it oversees and regulates various competence areas according to the country’s law.

As for the overarching missions, the CBA wants to maintain a degree of autonomy, transparency, and prestige. It wants to base itself on knowledge and aid the development of the country’s financial community. It also wants to maintain flexibility to be able to adapt to changes in the economic landscape. Lastly, it wishes to develop Armenia’s macroeconomic capabilities, aiding the government in solving economic difficulties.




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