Drams for dollars

Yerkir/am
29 July 2004

The recent mysterious shakes of the Armenian drams and US dollars
exchange rates caused general concerns. Obviously, the whole thing
first of all impacts regular citizens.

However, in addition to commenting the fact, it is also important to
define the steps for solving the situation. Below are the comments on
this issue by economic advisor of Armenian Revolutionary Federation’s
(ARF) Bureau, doctor of economic sciences Ara Nranian.

Q: How do you estimate recent rise of the Armenian drams against US
dollars?

A: Obviously, this phenomenon leaves negative consequences on the
economy of our country. It also impacts many layers of the
society. Armenia’s exporters are also among the sufferers. Media has
much written about how local Armenians funded from abroad have
suffered from this shakes. Generally, most of the population, as well
as our economy experience losses, which we cannot afford.

Q: And what about the 500-600 million dollar transfers that our
citizens annually receive from abroad?

A: Note that such transfers have a long history and, in addition, our
economy has received other inputs like the one from the Lincy
foundation. At that time, the rate of dram was quite high. Also note
that our country’sforeign trade balance has a negative balance of
about half a billion dollars. Moreover, Armenia is a classic sample of
a country with a negative balance. These transfers are what
considerably relieves our social-economic tension.

Q: And how do you explain the recent shakes at the currency markets?

A: I would rather refrain from pointing out a specific reason. I
believe appropriate bodies should react to it. I mean react by
actions, but not just announcements. The present `indifference’
prompts low realization of certain officials of their duty in the life
of country’s economy.

Q: What about possible solutions?

A: I could discuss certain suggestions like increase of the quantity
of drams. However, the recent developments cause much more serious
issues. I am talking about the current policy of `hard dram credit.’
Therecent developments make ambiguous its applicability. And now the
state must have its final sayin this situation, moreover given the
fact that these developments do not match the governmental and central
bank document statements of 2004.