CBA CHAIRMAN: WE’LL MAINTAIN FLEXIBLE EXCHANGE RATE IN COMING YEARS

Noyan Tapan
Jun 14 2006

YEREVAN, JUNE 14, NOYAN TAPAN. As in the previous years, in 2005 the
monetary and credit policy of the Central Bank of Armenia (CBA) was
focused on maintaining price stability and the target index of up to
3% inflation. The CBA has no intention to give priority to exchange
rate stability in the future either. The exchange rate regime will
continue being flexible as long as the dollarization degree is high
in Armenia. CBA Chairman Tigran Sargsian stated this at the June 13
sitting of the RA National Assembly when presenting the 2005 annual
report, which was taken into consideration.

According to him, the CBA policy was positively assessed by the
International Monetary Fund (IMF), the World Bank (WB) and other
financial rating-related international organizations.

As regards the speculation over the sale of gold by CBA, T. Sargsian
said this transaction was conducted in 2003 with a profit of about 3
bln drams (about 6.7 mln USD). He qualified the attempts to mislead
the public as unacceptale. According to him, the gold was sold because
of the necessity to ensure revenues of 3 bln drams and transer this
money to the state budget to incur expenditures. He noted that the
gold reserves make up a small share of the gross foreign assets:
the gross foreign assets currently make 770 mln USD, while gold
reserves – only 15 mln USD. T. Sargsian noted that the countries,
whose foreign debt exceeds their gross foreign assets, do not keep
gold as a means of controlling foreign currency assets, so Armenia
too has no need to accumulate gold in the next few years.