Dram Continues to Depreciate; Central Bank Still Optimistic

The Central Bank of Armenia claims that the Armenian dram's recent exchange rate fluctuation is of a short-term nature.

“The developments that have happened during the past few days in the international market and in the region, including large fluctuations in the currency market, contributed to the formation of certain expectations and increased fluctuations of the exchange rate in the domestic currency market.

The Central Bank believes that these phenomena are of a short-term nature and states its willingness to stabilize the situation in the market by all the tools it has available,” said the Central Bank’s statement.

The Central Bank also stated that speculations on the exchange rate and unnecessary conversions should be avoided, because in the case of such volatile behavior of the exchange rate the chance of risk becomes high and can lead to considerable damage.

“The Central Bank assures that, considering the short term nature of the fluctuations and the sufficient level of foreign exchange reserves, there are no considerable risks in the stability of prices and finances,” concludes the statement.

Note, that yesterday the Armenian dram significantly depreciated. During the day, the dram passed 460 to the dollar, while banks were selling for 450. However banks either refused to sell dollars or had a limited quantity for sale.

Last week, on November 24, when the dram registered a significant depreciation, the Central Bank continued to be optimistic about the decrease in value. In its statement, the Central Bank assessed the situation as the “exchange rate’s adjustments” which was contributed by competitiveness in exports, economic growth, creation and maintenance of sustainable employment, as well as, purchasing power for those receiving remittances. According to Khachatryan, the following points are economic truths that need to be proven in reality.