CENTRAL BANK CAN BE DISSOLVED
James Hakobyan

Lragir.am
9 Aug 06

It is known to every citizen of Armenia that the Central Bank of
the Republic of Armenia is not related with the exchange rate of the
dollar. The Central Bank is only for finding clarifications or excuses
for the depreciation of the dollar, which it does with great devotion,
it is unclear to whom.

On August 9 the Central Bank held an event, which has little direct
relation to the exchange rate of the dollar. And before the event the
press secretary of the Central Bank even told the news reporters not to
ask questions about the exchange rate because the topic is different,
and the speakers are not competent in the exchange rate.

And the topic was foreign money transfers. The Central Bank conducted
a survey with the help of the World Bank to assess the transfers. The
survey, the results of which were presented to news reporters, involved
households, the persons who make transfers and the companies, which
provide transfers. The survey was conducted in the months of February
to April in 2006.

And why are they presenting the results four months later? Well,
sure, they were summing them up. They asked for three months and
summed up for four months. And they finished now when the exchange
rate of the dollar is dropping fast, and naturally the society wants
to know why or due to who. And this is the best moment to tell how
big the influx of transfers to Armenia is, which naturally has an
impact on the exchange rate of the dollar, because the dollar is also
a product, and if there is too much of it, the price drops. This is
only our supposition, of course, but the Central Bank would not tell
everything. We are supposed to realize some things ourselves. And the
Central Bank merely says 37 percent of households in Armenia receive
foreign money transfers, mainly from Russia and the United States.

The receivers of money transfers said they spend the money for
everyday expenses.

Imagine that one third of the population of Armenia live on the money
they get from their relatives abroad, and do not even save it, spending
about 80 percent on everyday needs. In the meantime, the government of
Armenia does not worry that over one third of households in Armenia
are being robbed. Plus the people whose income is in Armenia but in
dollars or drams equal to the exchange rate, it is apparent that over
half of the population of Armenia is impoverished, and the government
calmly follows the process. One should not exclude that it also calmly
benefits from it.

We should also add people who get transfers, which are not reported
anywhere because these are delivered from hand to hand. Considering
this, we will see that over half of the population of Armenia suffers
from the dropping exchange rate of the dollar. The problem is that
the revaluation of the dram does not improve the state of people who
get income in drams. The income of these people remains the same,
whereas the prices in drams soar. Hence, the monetary and loan policy
of the government does not favor anyone.

It should also be taken into account that several hundreds of
thousand pensioners, whose income is in drams, and who are the
favorite example of the Central Bank, in reality live on the money
they get from abroad. In other words, it is hard to believe that over
70 percent of the population of Armenia gets income or more exactly
lives on the income they get in Armenia. Therefore, the Central Bank
should do the contrary rather, ask for three months and count for
four months. And generally, it will be better if the Central Bank
neither asks, nor counts, and dissolves as soon as possible. Anyway,
the dollar will float without the help of the Central Bank.