Central Bank of Armenia sees no serious inflation risks with changing national currency rate

 The national currency rate correction bears no serious inflation risks. Neither it threatens to the financial stability, Armenak Darbinyan, a member of the Armenian Central Bank Council, said in a statement, Tuesday. He explained the national currency rate correction with external factors such as slackening of the economic growth and devaluation of the national currencies of the partner-states as well as commodity market trends in a range of countries. 

"Our stress-tests show that such correction bears no serious risks to the financial stability," he said assuring that the Central Bank keeps the situation under control and will do everything possible within its policy to prevent speculations in the market and maintain the financial stability. 

A. Darbinyan said the given step of the Central Bank enabled settling two problems: maintain the competitive ability of exports and ensure transfers to Armenia that usually intensify in the pre-New Year period. In response to ArmInfo's question, he said international reserves must ensure at least three-month imports coverage, and at the moment Armenia's international reserves exceed the coverage level. "Therefore, here we see no risks to the stability in the market either,"  Darbinyan said.

As for the inflation effect, he said inflation is now at the lowest permissible threshold.  "By the end of the current year and next year, even if there are no unexpected risks, inflation will not exceed the level envisaged by the monetary policy - 4%(+/-1). The annual inflation totaled 2.2% by late October versus 0.2% at the beginning of the year," he said. The Central Bank's monetary policy for Q4 2014 anticipates a 3.2% inflation for late 2014.

The exchange rate of the US dollar to the Armenian dram increased by 16.6 points on 24 November versus 21 November (from 419.5 AMD/1 USD) to 435 AMD/1USD, refreshing the maximum rate of the last eight years.

By the latest data of the Central Bank, Armenia's gross international reserves for late Q3 2014 totaled $1.663 bln drams with a 6.7% decline for the quarter.