EDVARD SANDOYAN: T-bills should enter the secondary market (part 2)

— Yes, first, municipal securities must be issued, and then their secondary market will be created, if, of course, these securities come to the stock exchange. But somehow all this is not done.

— And the Capital Market Development Program came out with a similar proposal?

— Our organization is nongovernmental, and we can only recommend, which, however, we do. Apparently, the time has not yet come for this..

— But to check this, you probably need to at least release them on the secondary market. What can the state lose by releasing the same GKOs on the open market? — The point is that the GKO secondary market is a separate segment. The government is the issuer and the Ministry of Finance manages the domestic debt portfolio. This ministry, by issuing GKOs and using the funds from their placement to partially reimburse the internal budget deficit, solves its task. It will be another matter if in the future there comes a period (and it will surely come) when the Central Bank begins to use government securities as the main instrument for conducting monetary policy through operations on the open market. It is a classic tool used by central banks in all developed economies. And it is by buying and selling government securities on the secondary market that central banks regulate the monetary aggregate in the market and thereby affect the level of consumer prices, inflation, etc. Thus, the development of the economy directly depends on how the monetary policy of the Central Bank is done … This is a very serious tool — it is not only a source of replenishing the budget deficit (primary effect), but also serves for the free flow of money in the open financial market — from the deposits of the banking sector to the capital market and vice versa, to the real sector of the economy, through lending by banks. That is, the Central Bank can thus implement a policy of expensive or cheap money. But in order to pursue such a policy, we need to have a fully established system of relationships — what is called the capital market. But we do not have one of its main segments — liquid corporate securities. Those 175 corporate securities that are listed on our stock exchange are so illiquid, so limited in their circulation that it is simply not serious to analyze them and make any predictions on them. The volume of capitalization of the Armenian stock market, which fluctuates at the level of 20-25 million dollars, is just as frivolous even for our economy..