Thursday, December 11 2014

Devaluation of the national dram creates a good opportunity to stimulate local production and develop export-oriented economy, oppositionist Zoya Tadevosyan told reporters on 11 December.    

She said that the Central Bank's interventions in the foreign exchange market will deteriorate situation and deprive the country of its reserves. "After the default of 1998, Russia found a way out of the situation and began developing the local production. Armenia can learn that experience and, for instance, invest those $6 million in development of economy," the oppositionist said.

Economist Vardan Bostanjyan, in turn, qualified Central Bank's interventions as adequate and necessary.  According to him, the devaluation of the dram showed that the Armenian national currency is like a house of cards, as Armenia has no economy as such. The expert believes that dependence of the Armenian dram on such weak currency as rubles means that the country lacks national economic policy. "They seek investments in economy, but it is impossible to raise investments in the country where corruption is prospering and business is very risky," he said.

Earlier, Chairman of the CB Artur Javadyan told journalists that they will gradually reduce their daily interventions depending on demand and will bring them to zero by the end of the year. "These short-term daily interventions are not a deviation from our floating rate policy. They are much smaller than the market, so, we are not planning to shape the rate," Javadyan said. 

Armenia's Central Bank sold $6mln at the average exchange rate of 458.21 drams/$US1 at the inter-bank forex market on 9 Dec. The CBA press service has told ArmInfo that the cut-off price was 457.57 AMD/1 USD.   Currency market experts say that despite the small interventions of the CBA, the AMD devaluation has slowed down to some extent.  However, to restore the balance in the currency market, not only daily but also more serious interventions are needed.