The EBRD has engaged in its first reverse repo transaction in Armenia with Armswissbank.

To support the transaction, EBRD is lending up to AMD 2.3 billion to Armswissbank for one year against US dollar Eurobonds issued by the government.

“The transaction was guaranteed by Frontclear, a leading money markets development company funded by European governments and development finance institutions. This is the first transaction with Frontclear in Armenia.

Established in 2004, Armswissbank is a dynamically growing financial institution, operating as a private, corporate and investment bank, with a strong emphasis on brokerage services and liquidity management for Armenia’s financial sector,” the statement reads.  

EBRD remarked that the transaction is expected to have a strong demonstration effect on the local financial market and takes place under the first Global Master Repurchase Agreement (GMRA) signed between the EBRD and Armswissbank in January 2018, which allows parties to trade in repos.

The transaction became possible owing to the support by the Central Bank of Armenia.

“The EBRD’s participation is a strong signal to the authorities and international investors that the bank’s active engagement includes financial involvement as much as providing technical expertise to help develop local money markets,” the statement reads.

Frontclear is a financial markets development company focused on catalysing stable and inclusive interbank markets in emerging and developing countries (EMDC).