Daily says central bank seeks to devaluate dram in support of new prime minister

27.09.2016 16:55
Daily says central bank seeks to devaluate dram in support of new prime minister

YEREVAN, September 27. /ARKA/.  Armenia’s Central Bank is making drastic changes in its monetary policy, which have coincided with change of prime minister and formation of a new government, the local daily ‘Haykakan Zhamanak’ (Armenian Time) says in its today’s issue.

Specifically, the Central Bank’s Board decided last week to lower the reserve requirement in foreign currency for local commercial banks from 20% to 18. "This key indicator that has a significant impact on the interest rates on bank loans had remained unchanged for one year and eight months", the newspaper reminds.

Earlier, in December 2014, to stabilize the situation on the currency market and to curb currency speculation the regulator had raised reserve requirement in foreign currency from 12% to 24%. The next day the Armenian dram began to gain value. On December 24 the Central Bank lowered the reserve requirement in foreign currency from 24% to 20%.

According to the newspaper’s forecasts, these moves may in a certain way devalue the national currency, the dram, but at the same time, strengthen the business environment along with a further increase in tax revenues.

What is remarkable, according to the newspaper,  is that no significant changes in the financial and economic situation in the country have occurred, and such a decision could have been taken much earlier.

Moreover, the newspaper writes, today the Central Bank is supposed to discuss the refinancing rate issue, and, if it decides to cut the rate not by 0. 25%, but by 0.5%, we can say with certainty that that decision is made for political reasons to support the new prime minister. -0-


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