Devaluation of Armenian dram was expected, economists say

17.12.2020 18:14
Devaluation of Armenian dram was expected, economists say

YEREVAN, December 17. /ARKA/. The devaluation of the Armenian currency, the dram, was expected as a natural reaction to the changes taking place in the country, according to Armenian economists.

One of them, Vahagn Khachatryan, told a press conference on Thursday that the economic programs drawn up for the next three years before the war in the Nagorno-Karabakh conflict zone, have lost their relevance.

In his words, a U-turn took place in Armenia and the country that was before September 27 (the day the war began in Artsakh ) does not exist any longer.

The head of the Center for Innovative and Institutional Research Atom Margaryan called the devaluation a "natural reaction" and stressed that large players are able to destabilize the financial market of Armenia in a short time.

“Objectively speaking, the dram is devaluating due to external impulses along with large domestic spending and serious pressure on external reserves. Also, one should not forget what dynamics the external debt has and what changes in this direction await us in the next few years,' he said, adding that the public debt now seems incomparably expensive and risky.

According to him, these changes are a sign that Armenia has problems in its economic model and in the way new approaches to economic policy are being shaped. Margaryan also highlighted the political situation in the country as an important aspect.

“It is no secret that the owners of large capital are striving for power today. I want to say openly and clearly: in this regard, risks of destabilizing markets are also possible. Both the government and the Central Bank should be attentive in this issue and not allow influence,” he said.

Earlier, the Chairman of the Central Bank  Martin Galstyan pointed to the absence of market grounds for devaluation of the dram, saying that Armenian households and business suffered losses in the amount of 5-7 billion drams on attempts to balance on the dram's exchange rate.

The average market exchange rate of the US dollar against the Armenian dram dropped by 0.19 drams on December 16 from the previous day to 524.9 drams.  The exchange rate  overcame the psychological barrier of 500 drams on November 19, when one USD was trading at 500.82 drams.  ($1 - 518.77 drams). –0--


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