Economist: Armenian dram devaluation inevitable

27.08.2015 20:09
Economist: Armenian dram devaluation inevitable

YEREVAN, August 27. /ARKA/. Armenia's national currency will inevitably go down against the US dollar, Vardan Bostanjyan, an economist, told journalists on Thursday.

He finds it impossible to retain stability in prices only by the central bank's efforts and its monetary policy instruments - an appropriate tax and budgetary policy of the government is needed for that.

“The central bank and the government's steps should be coordinated,” Bostanjyan said. “The lack of one of these components load the other with the whole stabilization burden.”

Bostanjyan pointed out that Armenia's economy is dollarized, and, in addition, it heavily depends on Russia's economy. That is why Russia's all adverse developments strike hard at Armenia, which finds itself in more vulnerable position.

“Now we perceive everything through the lens of Armenia's financial market, but it should be understood that it is increasingly becoming difficult to control economic processes because of various objective and subjective factors,” he said.

As a whole, he said, adverse processes strengthened in the world by the end of the 20th century and in the beginning of the 21st century, confrontation between the East and the West escalated, financial flows underwent deformation and illegal migration intensified. As a result, the global economic system is deforming, and this impacts Armenia.

The US dollar fell 0.79 percentage points against the Armenian dram on Thursday, compared with Wednesday, and traded at 484.7 drams, on average, at Armenia’s forex market.
On August 24, the US dollar leapt 5.73 percentage points against the Armenian dram and traded at 483.43 drams, on average, at Armenia's forex market, and the European currency soared 16.56 percentage points to 554.83 drams per one euro.

The dram devaluation is triggered by adverse developments at world forex markets.
The Armenian national currency was driven down not only by outside factors, but also by inside things –Armenia's foreign trade turnover shrank 20.6% over the first half of this year to $2 186 million and money transfers contracted by 30.5% to $537.1 million. ----0-----


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