Armenia: foreign currency market review for December 19-23

27.12.2011 14:00
Armenia: foreign currency market review for December 19-23

YEREVAN, December 26. /ARKA/. Last week U.S. dollar’s average exchange rate against Armenian dram at NASDAQ OMX Armenia stock exchange rose by 0.39% to 383.75 drams. The overall trading from December 19 to 23 amounted to $23.82 million, which was 41.87% more than the previous week. The average exchange rate of USD cash sales rose by 0.39% to 385.69 drams on December 24.

Over the last four weeks the exchange rate was moving close to the psychological level of 385 drams per one USD. The past week was not exception. The stability of the currency market in Armenia depends greatly on steady private transfers to the country from non-residents. Against the backdrop of the continuing debt problems in the eurozone, as well as USD’s strong position at global currency markets, the dollar is very likely to continue to appreciate in Armenia. However, due to the pre-New Year week, this growth is not likely to be large. The growing demand for foreign currency from businesses and individuals who fear further devaluation of the dram, will show additional support for the U.S. currency. Indeed, according to the Central Bank of Armenia, the volume of net sales of foreign exchange by commercial banks last week amounted to $8.134 million, 2.85 times higher than the previous week. The average selling rate of the USD next week is likely to be within 384 - 387 drams.

The euro exchange rate last week was determined by developments in the global currency market FOREX, where the EUR/USD rate fell by 0.05% to 1.3041. Earlier this week, the single European currency managed to rise, reaching a one-week high of 1.3196 against the background of favorable macro-economic data from the U.S. and the eurozone, as well as the positive outcome of the bonds auction in Spain. However, the single European currency failed to hold out. The European Central Bank on Wednesday provided banks with 489.19 billion euros in loans for a period of three years, more than expected, which further intensified fears about the extent of the debt crisis across the eurozone. The euro responded by a sharp decline, reaching the daily minimum of 1.3023. As a result, the average selling rate of cash euro in Armenia last week did not change much from Monday rate staying at 506.50 drams.

The average selling rate of cash Russian rubles in Armenia in the previous week rose by 2.04% to 12.50 drams due to an increase in its value against the U.S. dollar and against the backdrop of increasing oil prices. The price of a barrel of Brent crude oil last week rose by 4.2% to 108.0 U.S. dollars after the release of positive economic data from the U.S., as well as due to fading excitement about debt problems in the eurozone. This week the dynamics of the Russian ruble will depend on economic statistics and oil prices. It is expected that U.S. economic data will be moderately positive to back the Russian currency. The average selling rate of cash ruble in Armenia over the next five trading days is likely to be in the range of 12.35 - 12.65 Drams.

Michael Verdyan, FOREX analyst, special for ARKA news agency.

The opinion of the author does not necessarily represent the opinion of ARKA.


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