YEREVAN, July 27. /ARCA/. A former Armenian prime minister warned today that a possible default in the USA would have disastrous consequences for Armenian economy.

Speaking at a news conference, Hrant Bagratian, who served as prime minister in the administration of first Armenian president Levon Te-Petrosian, said the default in the USA would hit first of all those countries whose financial reserves are in U.S. Dollars and Armenia is one of such countries.

He said the default in the USA would downgrade dramatically Armenian Central Bank’s international rating and some of local banks would become insolvent because the bulk of their financial reserves are also in USD.

According to Armenia’s Central Bank data, its mandatory reserves in the national currency stood at 109 billion drams on July 26 and those in foreign currency at 56.2 billion drams.

The US government will probably be able to continue to pay its bills for a few days even if it fails to reach a deal on extending the debt ceiling by an August 2 deadline, news reports said.

President Barack Obama on Monday warned that the current deadlock with the Republican-dominated lower house of Congress must be resolved 'by next Tuesday, August 2, or else we won't be able to pay all of our bills.' Republicans are demanding the president agree to implement spending cuts in return for their approval of his request for an extension to the national debt limit.

A vote scheduled for Wednesday on a compromise proposition by the House Speaker John Boehner, was postponed late Tuesday amid scepticism by fellow Republicans that it would pass. -0-