Makaryan: Armenian dram expected to continue its downward motion

14.06.2012 18:25
Makaryan: Armenian dram expected to continue its downward motion

YEREVAN, June 14. /ARKA/. The Armenian national currency is expected to continue its downward motion, and the U.S. dollar’s value will fluctuate between 460 to 520 drams throughout the next two years, Gagik Makaryan, chairman of the National Union of Employers, said on Thursday.

He told journalists that the Armenian dram will be driven down by dollar shortage in the country.
Makaryans said that the U.S. currency comes to Armenia from six sources – exports, which totaled $1.3 billion in 2011; remittances from abroad ($2 billion); loans extended by donor organizations, including the World Bank and International Monetary Fund; tourism; grants and reserve funds.

“This money is used mainly by importers, which need dollars for trading,” he said. “Imports totaled $4.1 billion in 2011, and the bulk of that money was borrowed from banks. In addition, there is the necessity to repay the state debt, which amounts to $1 billion, within two years. It means $500 million is needed every year, and this amount can’t be received as money transfers or from exports. Appropriately, demand for dollars will be 10-11% higher than now.”

The growing demand for the dollar amid the broad money lack will drive the dollar up in the next two years.

“The dollar will trade at 460 drams, on average, in 2013 and at 520 drams in 2014,” Makaryan said.
He also said that the dram devaluation will have a favorable impact on export, which will show a ten-percent average growth, but may also cause an industrial decline because raw materials are brought to the country from the outside.

Makaryan stressed the importance of one-month-long and one-year-long forecasts for the Armenian economy.

“Businessmen should know their risks when they borrow money to plan development of their businesses,” he said.

The Armenian dram plunged 5.4%, on average, against the U.S. dollar – from 393.07 drams to 414.6 drams per one dollar. -0--


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