IMF ADVISES CBA NOT TO BE AFRAID OF DRAM’S NOMINAL APPRECIATION

YEREVAN, MAY 27, NOYAN TAPAN. Director of IMF Yerevan Office James
McHugh said at the May 27 press conference that the International
Monetary Fund (IMF) advised the Central Bank of Armenia (CBA) to
continue its policy of price stabilization and not to be afraid of the
dram’s nominal appreciation. The IMF Executive Board approved the
price stabilization policy conducted by CBA and congratulated it on
achieving a low index of inflation. According to J. McHugh, CBA
controls money supply, which often leads to the appreciation of the
dram’s nominal exchange rate. However, the fixed exchange rate, he
noted, will result in a price growth in Armenia, which will hit first
of all the vulnerable sector of the population. As regards the issue
of the 17 exchange offices’ licences that were recently recognized
invalid by CBA, J. McHugh noted that “he explained to CBA that the
exchange offices conduct transactions involving too large sums.”
According to him, the international community is concerned about money
laundering, and in this connection IMF “persuades it member states to
take this problem seriously.” In particular, the legislation was made
stricter, as well as financial information centers were set up in each
country. Thus the CBA’s decisive steps are, according to J.McHugh,
quite normal.