AZG Armenian Daily #074, 26/04/2005

Economy

EXPORTERS INCUR LOSSES BUT ARE RELUCTANT TO GIVE FURTHER EXPLANATION

Is the fluctuation of exchange rate of foreign currency in Armenia the
result of economic factors or is made artificially? This is one of the most
central questions of the last few months. The president of the Central Bank
and other officials provide some explanation about inner and outer results
of this phenomenon, regardless how satisfactory they are for the society.
But those holding forth with the hypothesis of artificial fluctuation do not
provide a reliable ground.

It is over doubt that the devaluation of US dollar and evaluation of AMD has
its influence on our economy and businessmen. What is its influence? We
addressed this question to the top brass of Armenian business. Most of the
respondents, both home traders and exporters, said that they incur losses.
But strangely enough, many of them refused to express their views or
promised to do so but “forgot” (the Yerevan Cognac Factory, for one).

Exporters explain the loses resulted from dollar’s devaluation by the fact
that they make expenses in AMD and the profit comes in US dollar. But
everyone was reluctant to give any detailed explanation.

The shaking at the financial market impacts all exporters and discords
arouse between partner companies. But discords do not break partnerships but
instead result in new agreements. So, the head of a company representing
information technologies informed that they came to an agreement with other
companies operating in Armenia to make mutual payments based on dollar-AMD
exchange rate. The exporters may as well agree with each other on making
mutual payments but this by no means mean that the state may feel free of
supporting the exporters. The Armenian economy is certainly bound to have
powerful exporting potential if we want to mark development.

By Ara Martirosian