YEREVAN, August 28. /ARKA/. We expect the dram to begin to depreciate as the current account deficit widens and transfers slow, S&P Global Ratings said

That said, it expects the exchange rate to act as a key shock absorber and the FX reserve buffer to remain broadly stable.

It says also that Armenia's official reserves reached $4.1 billion in June, up 16% compared with the same period last year. Reserves have generally increased on the back of the Central Bank of Armenia's (CBA)'s net purchases of foreign currency (FX) last year to absorb excessive FX inflows, stemming from higher tourist arrivals and significant capital and remittances transfers.

‘We expect the dram to begin to depreciate as the current account deficit widens and transfers slow. That said, we expect the exchange rate to act as a key shock absorber and the FX reserve buffer to remain broadly stable.’

According to the Eurasian Development Bank, in terms of real effective exchange rate, the Armenian dram appreciated by 33.6% in 2022. At the end of June 2023. the dram's appreciation was 40% compared to the beginning of 2022.

By the end of July 2023 compared to the beginning of 2022, the Armenian dram has strengthened against the US dollar by 19.8% yoy, against the euro by 21.7% yoy, and against the Russian ruble by 32.4% yoy," according to EDB. -0-