Expert: Armenian Dram Should Be Devaluated For Sake Of Domestic Industry

01.11.2011 10:23
 Expert: Armenian Dram Should Be Devaluated For Sake Of Domestic Industry

YEREVAN, October 31. /ARKA/. Vazgen Safaryan, head of the Union of Armenia’s Domestic Manufacturers, finds it necessary to devaluate Armenian national currency for spurring export and domestic industry.

“The national currency should be weak against foreign currencies to ensure growth to the domestic industry and spur export,” he said on Monday.

Safaryan told journalists that only importers could take advantage of a strong dram.

The expert reminded Serzh Sargsyan’s regret voiced yet in March at the unjustified revaluation of the national currency. He quoted the president as saying that this process is not favorable for the economy and manufacturers and that “we will receive a very slow and stable devaluation without precipitous surges throughout the year”. The head of state called this a normal and favorable phenomenon for the national economy, first of all for exporters, as Safaryan said.

The expert said that this was a strategic direction indicated by the president.

Safaryan also reminded reporters that the 8.5% benchmark refinancing rate has long remained unchanged after the crisis.

“We had one of the highest benchmark refinancing rates,” he said. “The central bank set this rate to insure price stability and to mitigate inflation. But we saw inflation getting out of the projected range.”

Safaryan said that the banking regulator has already started lowering the rate.

The latest lowering was made on September 6, 2011 – by 0.5 percentage points to 8%.
The Armenian dram has devaluated by 2% since the beginning of this year from AMD 364.95 per one dollar in January to AMD 372.27 drams in October. –0—

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